Questar 4Q Net Falls 7.3%; Cuts 09 EPS, Output View

   DOW JONES NEWSWIRES 
 

Questar Corp.'s (STR) fourth-quarter net income dropped 7.3% on $54.3 million of mark-to-market losses on natural gas-swaps.

The natural gas company also lowered its 2009 estimates, as Questar accounts for significantly lower prices. It now sees earnings of $2.50 to $2.70 a share, down from its November view of $3.05 to $3.25 a share, and lowered its production forecast to 180 billion to 186 billion cubic feet of natural gas equivalent from its October view of 185 billion to 193 billion cubic feet.

Shares slumped 8.7% in after-hours trading to $31.56.

Meanwhile Questar posted fourth-quarter net income of $121.2 million, or 69 cents a share, down from $130.8 million, or 74 cents a share, a year earlier. Excluding the effect of net mark-to-market losses on natural gas basis-only swaps and after-tax gains on asset sales, Questar's earnings were 99 cents.

Revenue grew 18% to $878.8 million on natural-gas hedges.

Analysts polled by Thomson Reuters expected per-share earnings of 84 cents on revenue of $655 million.

Output jumped 32% as realized natural gas prices increased 17%. The exploration and production segment has hedged about 72% of forecast natural gas and oil-equivalent production for 2009 with fixed-price swaps.

Questar in November reported promising results from one of its wells in the Haynesville Shale in Louisiana, which could drive long-term growth. Additionally, natural gas is a popular alternative to oil energy, and natural gas companies could get a boost from President Barack Obama's push for domestic sources of fuel.

-By John Kell, Dow Jones Newswires; 201-938-5285; [e-mail]