Natural gas and electricity provider

NiSource

(NI) - Get Report

said its second-quarter earnings fell 46.2% from the year-ago period.

The Merrillville, Ind.-based company earned $21.0 million, or 8 cents a share, in the quarter, compared with $39.0 million, or 14 cents a share, a year ago. Income from continuing operations was $21.5 million, or 8 cents a share, in the quarter, compared with $8.3 million, or 3 cents a share, a year ago. Adjusted for items, the company posted net operating earnings of $39.1 million, or 14 cents a basic share, in the quarter. Analysts surveyed by Thomson First Call were expecting earnings of 14 cents a share.

Second-quarter revenue fell 3.2% from the year-ago period to $1.31 billion as against analysts' expectation of $1.35 billion.

The company said it is highly unlikely that it can attain its original net operating earnings estimate of $1.45 to $1.55 a share due to increased customer attrition and reduced customer usage of natural gas.

NiSource expects these issues to reduce net revenues by about $40 million, or 10 cents a share, and added lower net interest savings to decrease other income by $12 million, or 3 cents a share, compared with the initial 2006 earnings guidance. Analysts are expecting the company to earn $1.44 a share in 2006.

The company said the improvement in net operating earnings were due to sales of shorter-term transportation and storage services in its gas transmission and storage business; improved results in the electric business; decreased losses at Whiting Clean Energy; and an $8.2 million decrease in interest expense for the quarter due to the refinancing of $2.4 billion in long-term debt at lower rates during the fourth quarter of 2005. These improvements were partially offset by continued declines in residential customer natural gas usage, which affected results in the gas distribution business, and lower interest income.

Shares fell 65 cents Wednesday to $22.32.

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