El Paso Corp.'s (EP) first-quarter profit dropped 84%, while the
natural-gas and oil producer's El Paso Pipeline Partners LP (EPB)
saw earnings edge lower.
El Paso, which owns the largest network of interstate
natural-gas pipelines in North America, has been focused on
completing an expansion that includes five major pipeline and
liquid-natural gas projects. The company recently decided not to
sell a planned stake in its shale acreage in south Texas.
For the latest period, El Paso reported a profit of $62 million,
or 8 cents a share, down from $388 million, or 51 cents a share, a
year earlier. Excluding items such as derivatives impacts, earnings
fell to 30 cents from 33 cents.
Analysts polled by Thomson Reuters expected 28 cents.
The company's pipeline group saw pretax earnings rise 10%. The
exploration-and-production unit swung to a $31 million loss from a
$390 million profit a year earlier. Average realized prices,
including hedging, fell 9.9% for gas and rose 17% for oil,
condensate and natural-gas liquids.
Meanwhile, El Paso Pipeline posted earnings of $115 million, or
57 cents a share, down from $116 million, or 53 cents a share, a
year earlier. Operating revenue rose 9.9% to $366 million. Analysts
projected 58 cents and $356 million, respectively.
El Paso Pipeline is a so-called master limited partnership, a
tax-advantaged structure in which most of the company's earnings
are paid out to shareholders in the form of dividend-like
distributions. A separate "general partner," which is owned by El
Paso, oversees day-to-day operations.
Shares of El Paso and Pipeline Partners closed at $18.30 and
$35.46, respectively, on Wednesday and were inactive premarket.
By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com