El Paso Earnings Cheat Sheet: Two Quarters of Declining Profit Snapped

S&P 500 (NYSE:SPY) component El Paso Corporation (NYSE:EP) reported its results for the second quarter. El Paso Corp. is an energy company, provides natural gas and related energy products.

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El Paso Earnings Cheat Sheet for the Second Quarter

Results: Net income for the oil and gas company rose to $262 million (34 cents per share) vs. $157 million (21 cents per share) in the same quarter a year earlier. This marks a rise of 66.9% from the year earlier quarter.

Revenue: Revenue rose 21% to $1.23 billion.

Actual vs. Wall St. Expectations: EP reported adjusted net income of 25 cents per share. By that measure, the company beat the mean estimate of 24 cents per share.

Quoting Management: “We are very pleased with our financial and operational performance,” said Doug Foshee, chairman, president, and chief executive officer of El Paso Corporation. “With the completion of our Ruby Pipeline, we have placed three major projects into service this year and will complete two more by year end. And with natural gas likely to be the cornerstone for growth in electric power development, we continue to see exciting growth opportunities on the horizon. Execution in our E&P business is outstanding, with oil programs ramping up with results that are equal to or better than expectations. We are very encouraged by the completion of our first 7,000 foot plus lateral in the Wolfcamp Shale, and we see this program delivering many years of very profitable development across our large acreage position. On the financial front, we continue to make excellent progress, improving our balance sheet primarily through drop downs to El Paso Pipeline Partners. This progress has put us in position to separate into two outstanding companies by year end. We believe this is a great time to be a shareholder of El Paso.”

Key Stats:

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the first quarter, net income fell 84% while the figure dropped in the fourth quarter of the last fiscal year.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of 30 cents versus a mean estimate of net income of 28 cents per share.

Competitors to Watch: Kinder Morgan Inc (NYSE:KMI), El Paso Pipeline Partners, L.P. (NYSE:EPB), Kinder Morgan Energy Partners LP (NYSE:KMP), Southern Union Company (NYSE:SUG), Enterprise Products Partners L.P. (NYSE:EPD), Enterprise GP Hldgs. L.P. (EPE), Spectra Energy Partners, LP (NYSE:SEP), Blue Dolphin Energy Co. (NASDAQ:BDCO), Copano Energy, L.L.C. (NASDAQ:CPNO), and Atlas Pipeline Partners, L.P. (NYSE:APL).

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(Source: Xignite Financials)