Piedmont Natural Gas's Fiscal-Year Profit Falls 4.7%

By Tess Stynes 

Piedmont Natural Gas Co. said its earnings fell 4.7% in the latest fiscal year on higher costs, including one-time expenses related to its pending acquisition by Duke Energy Corp.

The pending $4.9 billion transaction was approved by U.S. antitrust regulators on Tuesday but still requires the approval of Piedmont shareholders and North Carolina utility regulators. The deal is expected to close by the end of 2016.

Both companies are based in Charlotte, N.C., and deliver natural gas to homes and businesses in different regions. But Duke primarily owns electric utilities that serve customers in seven states in the Midwest and Southeast.

The planned Duke-Piedmont transaction and Southern Co.'s pending $8 billion deal for AGL Resources Inc. come as U.S. electric utilities anticipate only modest growth in electricity sales in the next few years, while gas demand is expected to be robust.

For the 12-month period ended Oct. 31, Piedmont reported a profit of $137 million, or $1.73 a share, down from $143.8 million, or $1.84 a share, a year earlier. Excluding one-time items such as merger-related expenses, per-share earnings were $1.87. Revenue decreased 6.7% to $1.37 billion.

Analysts polled by Thomson Reuters expected a per-share profit of $1.87 and revenue of $1.43 billion.

Gross margin rose to 53% from 47 as lower gas costs outpaced the decline in revenue. Operations and maintenance expenses rose 8.7%.

Distribution volume rose 15%, mostly as the result of a 30% increase in volume delivered to power-generating plants.

Piedmont also affirmed its earnings guidance for its current fiscal year that ends in October 2016.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

December 23, 2015 09:15 ET (14:15 GMT)

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