Spectra Energy Posts Revenue and Profit Declines
May 04 2016 - 8:05AM
Dow Jones News
By Austen Hufford
Spectra Energy Corp. posted bigger-than-expected declines in
revenue and profit in the first quarter, as lower energy prices and
a weaker Canadian dollar continued to drag results.
Like others in the energy industry, the drop in energy prices
has hurt the pipeline and natural-gas storage company. Some of
Spectra's segments have also been hit by the oil-sensitive Canadian
dollar weakening against the U.S. dollar.
As a result, profitability in Spectra's Western Canada
Transmission business plunged as earnings before tax, interest,
depreciation and amortization fell to $123 million from $161
million.
Spectra's field-services segment swung to a profit of $3 million
from a loss of $17 million in the quarter the prior year, as
expansions and contract realignments boosted results.
Earnings in the distribution business slumped 22% to $123
million on warmer weather and the weaker Canadian dollar.
Spectra Energy Partners, the company's largest business,
increased earnings 4% to $473 million as expansion projects in the
natural-gas transmission business were partially offset by lower
short-term contract revenue due to warmer weather.
Spectra Energy Partners also raised its quarterly dividend to
65.125 cents per unit, up from 63.875 cents previously.
Last month, Spectra Energy issued 16.1 million common shares for
net proceeds of $479 million. The money was used to purchase 10.4
million common units from Spectra Energy Partners.
For the quarter, the Houston-based company reported a profit of
$234 million, or 35 cents a share, compared with $267 million, or
40 cents, a year earlier.
Revenue dropped 15% to $1.38 billion.
Analysts forecast adjusted earnings of 38 cents a share on
revenue of $1.58 billion, according to Thomson Reuters.
Shares in the company, which have gained 4.2% in the past three
months, were inactive in premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
May 04, 2016 07:50 ET (11:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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