swung to a first-quarter profit despite significantly lower revenue, as gains from an asset sale helped offset mark-to-market losses on a slug of natural gas hedges.
The Houston natural gas company earned $106 million, or 17 cents a share, in the quarter, compared with a loss of $206 million, or 32 cents a share, last year. Revenue fell 22% to $1.21 billion. Analysts had been forecasting earnings of 21 cents a share in the 2005 quarter.
Earnings before interest and taxes in the latest quarter included a net $31 million gain from various asset transactions, compared with a charge of $269 million last year. The latest quarter also included a $106 million mark-to-market loss on various derivatives the company owned and sold to manage gas-production price risk.
Among its main segments, El Paso said, its natural gas pipeline business earned $412 million before interest and taxes in the latest quarter, compared with $386 million a year ago, while its production business earned $183 million on that basis, compared with $204 million a year ago.
"Our pipelines delivered solid financial results and growth prospects look good. Our production business is making the progress necessary to complete its turnaround this year, and it is ahead of pace to replace production in 2005," the company said.