Back to top

Analyst Blog

Natural gas-focused energy company Questar Corporation (STR - Analyst Report) reported adjusted first quarter 2014 earnings of 48 cents per share, in line with the Zacks Consensus Estimate.

However, the bottom line increased over 17% from the prior-year level of 41 cents. Improvement in the company’s Wexpro and Questar Gas segments aided the results, supported by a decline in operating expenses.

Questar reported first quarter revenues of $456.9 million, down 4.2% from the year-ago quarter. The top line also failed to meet the Zacks Consensus Estimate of $547.0 million. Lower sales volume from the Questar Gas and Questar Pipeline segments prompted the miss.

Segment Analysis

Questar Gas: The segment generated $396.3 million in revenues, down 5.3% from the prior year quarter, owing to a decrease in natural gas sales. However, segment operating income of $69.8 million increased from $64.3 million reported in the first quarter of 2013. Questar’s cost control measures led to the improvement.

As of Mar 31, 2014, Questar Gas served 952,500 customers, up 1.6% from the year-ago quarter.   

Wexpro: Segment revenues increased 19.4% year over year to $12.3 million in the quarter. Segmental income from continuing operations also increased to $48.5 million from $39.8 million in the prior-year quarter. The outperformance can be attributed to the increase in production volume and higher price realizations.  

Quarterly production of natural gas increased 20.1% to 18.5 billion cubic feet (Bcf) from 15.4 Bcf.

Questar Pipeline: The segment reported revenues of $48.0 million compared with $48.3 million in the comparable quarter last year. Income from continuing operations came in at $30.1 million against $30.2 million in first quarter 2013. A decline in transportation volumes and a drop in NGL sales and realization can be blamed for the decrease. It was, however, partially offset by higher transportation revenues.

Total natural gas transportation volumes were $215.9 million decatherms, down from the prior-year level of 233.7 million decatherms.

Expense Summary

The general and administrative expenses for the quarter decreased 6.8% from the prior-year period to $31.5 million, while depreciation, depletion and amortization costs increased 14.0% to $55.3 million. Total operating expense – at $308.6 million – decreased 10.7% from the first quarter of 2013 primarily due to a significant drop in cost of sales.


As of Mar 31, 2014, Questar had long-term debt (including current portion) of $1,285.6 million, with a debt-to-capitalization ratio of 50.6%.  


For 2014, Questar reiterated earnings guidance in the range of $1.18 to $1.28 per share on the back of a robust first quarter.

Zacks Rank & Stocks to Consider

Questar currently holds a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players from the industry such as AGL Resources Inc. (GAS - Analyst Report), Delta Natural Gas Company, Inc. and New Jersey Resources Corp. (NJR - Snapshot Report). All these firms currently sport a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.71 +4.51%
BANCO DO BR… BDORY 14.50 +3.94%
WEATHERFORD… WFT 23.79 +3.73%
EQT MIDSTRE… EQM 97.64 +2.85%
GREEN PLAIN… GPRE 44.97 +2.65%