MERRILLVILLE, Ind. (AP) ¿ Gas and electric utility NiSource Inc. posted a third-quarter net loss on higher pension expenses, although revenue rose 10 percent as gas distribution, transmission and storage businesses improved.

For the July-September period, NiSource said its net loss from continuing operations was $9.7 million, or 3 cents a share, compared with net income from continuing operations of $31.1 million, or 11 cents a share, in the year-ago quarter.

Excluding special items, NiSource said net operating earnings were $18.8 million, or 7 cents a share.

The company said pension expenses increased $13 million and interest expenses rose $10.2 million in the quarter.

Gross revenue totaled $884.8 million, down from $1.18 billion a year ago.

Analysts surveyed by Thomson Reuters had forecast a loss of 1 cent per share. Such estimates typically exclude one-time gains and charges.

For 2009, NiSource reaffirmed net operating earnings of $1 per share to $1.10 per share. Wall Street analysts have estimated 2009 earnings at $1.03 a share.

"As we indicated during prior updates, NiSource's original outlook assumed a moderate level of economic recovery during the second half of 2009," Robert C. Skaggs Jr., president and chief executive, said in a statement.

"While there have been some encouraging signs that the downturn has bottomed, we have yet to see a material impact on volumes and margins, and we continue to believe that recovery in our markets will be gradual," he said.

Shares of NiSource fell 34 cents, or 2.6 percent, to $12.97 in afternoon trading.

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