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Southwest Gas (SWX) Earnings Beat in Q2, Revenues Miss

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Southwest Gas Corporation (SWX - Free Report) reported second-quarter 2017 operating earnings of 37 cents beating the Zacks Consensus Estimate of 28 cents. Moreover, reported earnings were higher the year-ago figure of 19 cents by 94.7%.

Total Revenue

Southwest Gas’ total revenue of $560.5 million missed the Zacks Consensus Estimate of $589 million by 4.8%. However, revenues were up 2.3% from $547.7 million in the prior-year quarter.

Quarterly Highlights

Southwest Gas’ total operating margin was pegged at $190.7 million, up 3.5% from $184.2 million a year ago.

Net cost of gas sold during the quarter amounted to $69.4 million, down 2.8% from $71.4 million a year ago.

Net interest deductions increased $430,000 between quarters primarily due to issuance of $300 million of senior notes. This was partially offset by reductions associated with various debt redemptions during the past twelve months and lower interest expense associated with PGA balances as compared with the prior-year quarter.

Southwest Gas Corporation Price, Consensus and EPS Surprise

 

Southwest Gas Corporation Price, Consensus and EPS Surprise | Southwest Gas Corporation Quote

Outlook

Natural Gas Segment:

Operating income is expected to increase by 11–13% as compared with the prior year.

Net interest deductions for 2017 are expected to increase about $2 million as compared with the prior year due to higher short-term interest rates and interest on PGA balances.

Capital expenditures in 2017 are estimated to be approximately $570 million, in support of customer growth, system improvements, and accelerated pipe replacement programs.

Construction Services Segment:

Revenues for 2017 are anticipated to be 2–5% greater than 2016 levels.

Operating income is expected to be approximately 5% of revenues.

Performance of Other Utilities

Among other players from the industry that have reported second-quarter earnings so far, Northwest Natural Gas Company (NWN - Free Report) beat its Zacks Consensus Estimate, while UGI Corporation (UGI - Free Report) and ONEOK, Inc. (OKE - Free Report) have missed their respective Zacks Consensus Estimate.

Zacks Rank

Southwest Gas currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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