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NICOR Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 1, 2011 08:00AM

NICOR Inc. (GAS) filed Quarterly Report for the period ended 2011-09-30. Nicor Inc has a market cap of $2.56 billion; its shares were traded at around $56.25 with a P/E ratio of 22.1 and P/S ratio of 0.9. The dividend yield of Nicor Inc stocks is 3.3%. Nicor Inc had an annual average earning growth of 0.2% over the past 10 years.



Highlight of Business Operations:

Nicor s other energy ventures operating income decreased $7.3 million for the nine months ended September 30, 2011 compared to the prior year due primarily to lower operating income at Nicor Enerchange ($8.2 million decrease), partially offset by higher operating income at Nicor s energy-related products and services businesses ($1.7 million increase). Lower operating income at Nicor Enerchange was due primarily to unfavorable costing of physical sales activity. Higher operating income at Nicor s energy-related products and services businesses was due to lower operating expenses ($3.1 million decrease), partially offset by lower operating revenues ($1.4 million decrease).

Shipping operating revenues decreased $5.5 million and $14.3 million for the three and nine months ended September 30, 2011, respectively, compared to the corresponding prior year periods due to lower volumes shipped ($11.9 million and $34.0 million decreases, respectively), partially offset by higher average rates ($6.4 million and $19.7 million increases, respectively). Volumes shipped were adversely impacted by the continued economic slowdown and increased competition. Higher average rates were due primarily to an increase in both cost-recovery surcharges for fuel and base rates.

Gas distribution margin decreased $11.2 million for the three months ended September 30, 2011 compared to the prior year. Gas distribution margin includes the revenue from the riders noted above which totaled $(1.6) million and $12.2 million for the three months ended September 30, 2011 and 2010, respectively. Gas distribution margin excluding those riders increased $2.6 million for the three months ended September 30, 2011 compared to the prior year due primarily to higher power generation revenue ($2.5 million increase). Gas distribution margin decreased $28.1 million for the nine months ended September 30, 2011 compared to the prior year. Revenue from the riders noted above totaled $0.3 million and $38.1 million for the nine months ended September 30, 2011 and 2010, respectively. Gas distribution margin excluding those riders increased $9.7 million for the nine months ended September 30, 2011 compared to the prior year due primarily to the impact of colder weather (approximately $9 million increase).

Gas distribution operating and maintenance expense. Gas distribution operating and maintenance expense decreased $14.2 million for the three months ended September 30, 2011 compared to the prior year. Operating and maintenance expense related to riders noted above decreased $13.8 million for the three months ended September 30, 2011 compared to the prior year. Excluding the impact of such riders, operating and maintenance expense decreased $0.4 million for the three months ended September 30, 2011 compared to the prior year due to lower bad debt expense ($1.0 million decrease). Total bad debt expense, including the impact of the bad debt rider, for the three months ended September 30, 2011 was $0.8 million compared to $18.5 million in the prior year. Bad debt expense in 2011 and 2010 includes $7.8 million and $8.8 million, respectively, based on gas distribution revenues recognized in the quarter, of the approximately $63 million annual expense assumed to be collected through base rates; and $(7.0) million and $9.7 million, respectively, of expense (income) which is equal to the revenue recognized under the bad debt rider.

Gas distribution operating and maintenance expense decreased $7.1 million for the nine months ended September 30, 2011 compared to the prior year. Operating and maintenance expense related to riders noted above decreased $37.8 million for the nine months ended September 30, 2011 compared to the prior year. Excluding the impact of such riders, operating and maintenance expense increased $30.7 million for the nine months ended September 30, 2011 compared to the prior year due primarily to the absence of 2010 s recovery of 2008 and 2009 bad debt expense under the bad debt rider ($31.7 million), partially offset by lower bad debt expense ($1.2 million decrease). Total bad debt expense, including the impact of the bad debt rider, for the nine months ended September 30, 2011 was $35.5 million compared to $37.2 million in the prior year. Bad debt expense in 2011 and 2010 includes $44.9 million and $46.1 million, respectively, based on gas distribution revenues recognized in the period, of the approximately $63 million annual expense assumed to be collected through base rates; and $(9.4) million and $22.8 million, respectively, of expense (income) which is equal to the revenue recognized under the bad debt rider. Bad debt expense in 2010 also includes the recognition of the $31.7 million benefit associated with the net under recovery of bad debt expense from 2008 and 2009.

Read the The complete Report



Stocks Discussed: GAS,
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