DOW JONES NEWSWIRES
El Paso Corp.'s (EP) third-quarter profit sank 85% on slumping
natural gas prices and derivative impacts.
Shares fell 5.5% after-hours to $9.26 as revenue was well short
of analysts' expectations. The stock through the close was up 25%
this year.
Oil-and-gas companies have been hurt amid a glut of U.S. output
and slack demand, especially from industrial users. Natural-gas
prices also have been on the skids, dropping to multi-year lows
during the quarter before rebounding slightly in recent weeks.
In October, El Paso said it would reenter the natural-gas
gathering and processing business five years after mounting debt
forced the company to stop. El Paso said it would form a new
segment that will acquire and possibly build gathering and
processing facilities to treat and transport gas.
El Paso reported third-quarter earnings of $67 million, or 8
cents a share, down from $445 million, or 58 cents a share, a year
earlier. Excluding derivative and other impacts, earnings fell to
23 cents from 35 cents.
Revenue fell 39% to $981 million.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 22 cents on $1.12 billion in sales.
The company's pipeleine business saw earnings before interest
and taxes rise 17% amid pipeline expansions and lower opertings
costs. Profit slumped 84% in its exploration and production
business on the tumble in commodity prices. Average daily output
dropped 7.7%.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com