Spectra Energy Posts Revenue and Profit Declines

By Austen Hufford

Spectra Energy Corp. posted bigger-than-expected declines in revenue and profit in the first quarter, as lower energy prices and a weaker Canadian dollar continued to drag results.

Like others in the energy industry, the drop in energy prices has hurt the pipeline and natural-gas storage company. Some of Spectra's segments have also been hit by the oil-sensitive Canadian dollar weakening against the U.S. dollar.

As a result, profitability in Spectra's Western Canada Transmission business plunged as earnings before tax, interest, depreciation and amortization fell to $123 million from $161 million.

Spectra's field-services segment swung to a profit of $3 million from a loss of $17 million in the quarter the prior year, as expansions and contract realignments boosted results.

Earnings in the distribution business slumped 22% to $123 million on warmer weather and the weaker Canadian dollar.

Spectra Energy Partners, the company's largest business, increased earnings 4% to $473 million as expansion projects in the natural-gas transmission business were partially offset by lower short-term contract revenue due to warmer weather.

Spectra Energy Partners also raised its quarterly dividend to 65.125 cents per unit, up from 63.875 cents previously.

Last month, Spectra Energy issued 16.1 million common shares for net proceeds of $479 million. The money was used to purchase 10.4 million common units from Spectra Energy Partners.

For the quarter, the Houston-based company reported a profit of $234 million, or 35 cents a share, compared with $267 million, or 40 cents, a year earlier.

Revenue dropped 15% to $1.38 billion.

Analysts forecast adjusted earnings of 38 cents a share on revenue of $1.58 billion, according to Thomson Reuters.

Shares in the company, which have gained 4.2% in the past three months, were inactive in premarket trading.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

May 04, 2016 07:50 ET (11:50 GMT)

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