CORRECT: Nicor 2Q Profit Down 21% On Shipping Weakness

("Nicor 2Q Profit Down 21% On Shipping Weakness," published at 7:28 a.m. EDT, misstated the type of rate in the second paragraph. A correct version follows.)

 
   DOW JONES NEWSWIRES 
 

Nicor Inc.'s (GAS) second-quarter earnings fell a less-than-expected 21% on weakness in the company's shipping business.

Chairman and Chief Executive Russ Strobel called year-to-date results "solid, particularly given the challenging economic environment." He said higher utility rates are beginning to offset higher costs in its distribution business while shipping operations "faced continued pressure on volumes due to the economic slowdown."

Distribution earnings rose in the latest quarter on the hike in rates while the shipping business had lower profit on reduced volume and prices.

The natural-gas company, whose operations are centered in northern Illinois, reported a profit of $22.9 million, or 50 cents a share, down from $28.9 million, or 64 cents, a year earlier. Revenue slid 36% to $447.6 million.

Analysts polled by Thomson Reuters most recently were looking for earnings of 42 cents on revenue of $589 million.

Operating margin rose to 8.8% from 5.8% as gas costs slumped 60%, but earnings fell on an 88% plunge for interest income.

Gas deliveries dropped 2% while shipping volume actually rose 0.4%. The average sales price tumbled 61% on the cost drop.

Shares of Nicor, which affirmed its 2009 earnings forecast, closed at $37.50 on Thursday and didn't trade premarket. The stock has rallied 35% from a six-year low in March.

- By Tess Stynes and Kevin Kingsbury, Dow Jones Newswires; 212-416-2481; [e-mail]