A warm start to 2012 led to lower than expected first-quarter profits for Atlanta-based AGL Resources, the nation's largest natural gas distribution company.
AGL reported net income of $130 million, or $1.11 a share, compared with $124 million, or $1.59 a share, during the first quarter a year ago. AGL’s net income rose, but the earnings per share went down because the number of shareholders increased after the company bought Illinois-based Nicor Gas last December.
Expenses from buying Nicor, as well as customers not running the heat as much, were factors in the lower than projected earnings.
"While the results are not what we hoped for in terms of first-quarter performance, if you look at the factors we were able to influence, things like corporate overhead expenses and other business performance, we are on track with our expectations for the year," John Somerhalder II, AGL Resources' chairman, president and chief executive officer, told shareholders at the company's annual meeting Tuesday.
The company's distribution unit, which includes Atlanta Gas Light and six other utilities, reported profits of $194 million for the quarter ending March 31, compared with $141 million during the same period a year ago. Profits for Sequent Energy Management, AGL's wholesale services arm, dropped sharply to $19 million, compared with $33 million a year ago.
"With the low gas prices, that is very favorable to most of our business for the long term. It's very good for our customers ... it’s good for the country, it’s good for the industry in the long run, it’s good for our business in total," Somerhalder said.
The warm weather may lead AGL to reduce what it thinks the company’s future earnings will be for 2012, which now ranges between $2.80 and $2.95 a share.
AGL's shareholders approved the election of 16 board members to one-year terms at the company's annual meeting. Shareholders also approved the executive officers' compensation and Pricewaterhouse Coopers as the company's independent auditor.
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