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Southwest Gas Corp. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: February 28, 2012 01:29PM
Southwest Gas Corp. (SWX) filed Annual Report for the period ended 2011-12-31. Southwest Gas has a market cap of $1.96 billion; its shares were traded at around $42.2 with a P/E ratio of 18.6 and P/S ratio of 1.1. The dividend yield of Southwest Gas stocks is 2.5%. Southwest Gas had an annual average earning growth of 1.9% over the past 10 years.
Highlight of Business Operations:Interest rate risk is the risk that changes in interest rates could adversely affect earnings or cash flows. The primary interest rate risk for the Company is the risk of increasing interest rates on variable-rate obligations. Interest rate risk sensitivity analysis is used to measure interest rate risk by computing estimated changes in cash flows as a result of assumed changes in market interest rates. In Nevada, fluctuations in interest rates on $100 million of variable-rate Industrial Development Revenue Bonds (IDRBs) are tracked and recovered from ratepayers through an interest balancing account, which mitigates risk to earnings and cash flows from interest rate fluctuations on these IDRBs between general rate cases. As of December 31, 2011 and 2010, Southwest had $209 million and $100 million, respectively, in variable-rate debt outstanding, excluding the IDRBs noted above. Assuming a constant outstanding balance in variable-rate debt for the next twelve months, a hypothetical 1% change in interest rates would increase or decrease interest expense for the next twelve months by approximately $2 million.
Stocks Discussed: SWX,