National Fuel Gas Co. is cashing in on its expanded pipeline network and its growing natural gas drilling operations in Pennsylvania.
The Amherst-based energy company said its second-quarter profits jumped by 46%, excluding a huge write-down it took last year and other one-time items.
The earnings easily topped analyst forecasts, and National Fuel said it was hiking its earnings guidance for the current fiscal year, which ends in September, by 4% to a midpoint of $3.95 per share, up 15 cents from its previous forecast.
National Fuel benefited from rising revenue from its growing pipeline network, as well as from rising production at its recently expanded natural gas fields in northwestern Pennsylvania. Total oil and natural gas production increased by 43% from a year ago as natural gas prices rose.
"National Fuel had an excellent second quarter, with significant earnings growth resulting from the ongoing expansion of our interstate pipeline systems and the continued positive impact of our Appalachian upstream and gathering acquisition completed last summer," said David P. Bauer, the company's president and CEO.
National Fuel's adjusted profits, which exclude one-time items and charges, grew to $123.2 million, or $1.34 per share, during the quarter that ended in March, compared with $84.2 million, or 97 cents per share, a year earlier. The earnings topped analyst forecasts by 14 cents per share.
Profits grew by 13% at National Fuel's pipeline business, while operating profits were up 9% at its oil and natural gas drilling operations, excluding a big write-down that it took last year on the value of its energy reserves.
National Fuel said its production jumped in large part because of the additional wells it acquired last year from Royal Dutch Shell. The company also was helped by a nearly 8% increase in the price it received for the natural gas it produced.