Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Natural gas-focused energy company Questar Corporation (STR - Analyst Report) reported mixed fourth-quarter 2012 results, owing to high rate of drilling success, partially offset by steeper depreciation, administrative and interest expenses.

Earnings per share (excluding retirement incentive costs) came in at 38 cents, up 11.8% from the profit of 34 cents earned in the prior-year quarter. The result surpassed the Zacks Consensus Estimate by 3 cents.

Total revenue came in at $343.0 million, failing to match the Zacks Consensus Estimate of $381.0 million. On a year-over-year basis, revenue slipped 3.3% from the year-ago level of $354.8 million due to weak performance by Questar Gas segment.

Segment Analysis

Questar Gas: The segment generated $281.0 million in revenue, down 5.6% from the prior year, hurt by soft residential and commercial sales of natural gas. The segment registered an income of $40.3 million, against an income of $37.5 million in the fourth quarter of 2011.

As of Dec 31, 2012, Questar Gas served 930,800 customers, up 11,500, or 1.3% year over year.

Wexpro: Consolidated sales increased 7.1% year over year to $9.0 million in the quarter. Segmental income from continuing operations also increased to $40.2 million from $37.4 million in the prior-year quarter, attributable to a higher average investment base.

Quarterly production of natural gas edged up 1.5% to 13.6 billion cubic feet (Bcf), up from 13.4 Bcf in the fourth quarter of 2011.

Questar Pipeline: Consolidated revenue of $53.0 million increased by 9.1% from the $48.6 million in the comparable quarter last year. Income from continuing operations came in at $28.8 million, reflecting a drop of 7.1% year over year. The quarter’s performance was impacted by less revenue in transportation and natural gas liquids along with a rise in depreciation, interest and G&A costs.

Total natural gas transportation volumes in the quarter were $227.4 million decatherms, up from the prior-year level of 200.8 decatherms.

Financials

As of Dec 31, 2012, Questar had long-term debt (including current portion) of $1,180.9 million, with a debt-to-capitalization ratio of 53.3%.

During 2012, the company bought back 4.6 million shares for $19.95 per share, netting $92 million.  

Guidance

For 2013, Questar guides for earnings in the range of $1.12 to $1.20 per share. Questar expects that the significant cash flows that the company has generated from Wexpro and Questar Pipeline will favor for future and continued reinvestment in their business.

Stocks to Consider

Questar currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at other energy firms like Calumet Specialty Products Partners LP (CLMT - Snapshot Report), NGL Energy Partners LP (NGL - Snapshot Report) and Global Partners LP (GLP - Snapshot Report) as attractive investments. All these firms – sporting a Zacks Rank #1 (Strong Buy) – offer value and are worth accumulating at current levels.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

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 Zacks.com. 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
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%