The new federal tax cuts will be making National Fuel Gas Co. a lot more profitable this year.
The Amherst-based energy company hiked its earnings forecast for this year by about 14 percent, largely because of the reduction in its federal tax rate because of the new tax law.
National Fuel also said its first-quarter profits were significantly better than analysts expected, even without the impact of the new tax law. The company's adjusted earnings, which exclude one-time items, were $87.7 million, or $1.02 per share, down 1 percent from $88.9 million, or $1.04 per share, a year ago.
The earnings were much better than the 82 cents per share that were expected by the three analysts surveyed by Zacks Investment Research.
"There was no real excitement during the quarter, which is a really good thing in the natural gas business, where surprises are generally not a good thing," said Ronald J. Tanski, National Fuel's president and CEO, during a conference call on Friday.
Including one-time items, National Fuel's earnings more than doubled to $198.7 million, or $2.30 per share, from $88.9 million, or $1.04 per share, a year ago. Most of the increase was due to a $111 million, or $1.29 per share, reduction in the company's deferred tax liability under the new tax law.
Because the new tax law is expected to lower National Fuel's corporate tax rate from 35 percent to 24.5 percent, the company said it now expects to earn between $3.20 and $3.40 per share during the fiscal year that ends in September. That's up from its previous forecast of $2.75 to $3.05 per share.