Nicor 3Q profit soars on cheaper gas costs

Nicor reports higher 3rd-qtr profit on cheaper natural gas costs, raises year profit outlook

• On 3:36 pm EDT, Friday October 30, 2009

NAPERVILLE, Ill. (AP) -- Natural gas distributor Nicor Inc. on Friday said its third-quarter profit jumped more than 10 times from the prior-year period levels, driven mainly by dramatically lower expenses for natural gas.

During the latest quarter natural gas prices ranged between $2.50 and $5 per 1,000 cubic feet. This is drastically cheaper than natural gas prices a year ago, when the commodity traded at record levels close of nearly $14 per 1,000 cubic feet.

Nicor's natural gas costs tumbled 61 percent to $70.2 million in the third quarter, down from $180 million in the prior-year period.

This fattened margins, boosting quarterly earnings to $13.6 million, or 30 cents per share, compared with $1.3 million, or 3 cents per share, during the same period last year.

Analysts polled by Thomson Reuters estimated a profit of 4 cents per share, on average.

Revenue declined 26 percent to $325.6 million, down from $440.3 million in the prior-year period. Analysts forecast average revenue of $383 million.

Based on stronger results and improved expectations for its gas distribution business, Nicor raised its full-year profit estimate to a range between $2.69 per share and $2.89 per share. This compares with earlier estimates of $2.54 per share and $2.74 per share. These estimates include about 9 cents per share from sale of the company's equity interest in EN Engineering.

Shares of Nicor fell 20 cents to $37.33 in afternoon trading.

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