A warmer winter and ample natural gas supplies at steady prices all factored into a drop in profits for Atlanta-based AGL Resources, the company reported Wednesday.
The natural gas distribution company's fourth-quarter profits were $33 million, or 37 cents a share, nearly half of the $64 million, or 82 cents a share, profit made in the fourth quarter of 2010. For 2011, the company's profits were $172 million ($2.14 a share), down 26 percent from $234 million ($3.02 a share) in 2010.
"By our measures, it looks like overall, weather, both late last year and then early this year, it was one of the warmest, if not the warmest, in 80 years," said John Somerhalder II, AGL Resources' chairman, president and chief executive officer.
A mild winter means the customers of AGL's Atlanta Gas Light and its five other regulated gas utility companies aren't running the heat in their homes and businesses more often.
A stagnant natural gas market also continued to play heavily into AGL's earnings. The company's wholesale energy services units, Sequent Energy Management and new addition Nicor Enerchange, reported a near 90 percent drop in profits in 2011. Sequent's net income for the year was $5 million, compared with $49 million for 2010.
AGL is considering restructuring Sequent to insulate the business from lower, less-fluctuating natural gas prices. Sequent is still "very important to our overall business mix," however, Somerhalder said.
AGL bought Illinois-based Nicor Inc. in December. The deal created the nation's largest natural gas-only distribution company, with 4.5 million utility customers in seven states.
Somerhalder called the deal the "most transformational event in [AGL's] history."
AGL has 2.3 million customers throughout its system, 1.5 million of who are Atlanta Gas Light customers. Nicor has 2 million customers.
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