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South Jersey Industries Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 7, 2012 04:33PM

South Jersey Industries Inc. (SJI) filed Quarterly Report for the period ended 2012-06-30. South Jersey Industries Inc has a market cap of $1.6 billion; its shares were traded at around $53.47 with a P/E ratio of 18.1 and P/S ratio of 1.9. The dividend yield of South Jersey Industries Inc stocks is 3.1%. South Jersey Industries Inc had an annual average earning growth of 4% over the past 10 years.



Highlight of Business Operations:

Operating Revenues - Utility - Revenues decreased $5.9 million during the three months ended June 30, 2012, compared with the same period in the prior year after eliminating intercompany transactions. Firm sales revenue decreased $1.2 million, or 2.1%, during the second quarter of 2012 versus the same period in 2011 as a result of lower natural gas costs, primarily in the Cogeneration and Electric Generation markets. Firm sales volume to those markets remained consistent with prior year; however, revenue decreased $1.2 million, or 43.4%, as lower gas costs are being passed through to those customers. While changes in gas costs and BGSS recoveries may fluctuate from period to period, SJG does not profit from the sale of the commodity. Therefore, corresponding fluctuations in Operating Revenue or Cost of Sales have no impact on Company profitability, as further discussed below under the caption “Margin.”

Revenues decreased $1.1 million during the six months ended June 30, 2012, compared with the same period in the prior year after eliminating intercompany transactions. Firm sales revenue decreased $7.9 million, or 3.6%, during the first six months of 2012 versus the same period in 2011 as a result of lower firm throughput, as reflected in the table above. This reduction in sales was the direct result of weather that was 20.0% warmer than last year. The impact of the warmer weather can readily be seen in the throughput table above; however, the impact on firm revenue is not as evident in the corresponding revenue table above. As SJG provided firm customers with a $21.1 million refund in March 2011 due to lower gas costs, revenues during the first quarter of 2011 were also lower than normal.

SJE s revenues from retail gas operations, net of intercompany transactions, decreased $8.9 million, or 39.6%, and $27.7 million, or 46.6%, for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011. Excluding the change in unrealized gains and losses recorded on forward financial contracts of $(0.3) million and $(0.6) million, revenues decreased $9.2 million and $28.3 million for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011. The decrease in revenues was mainly due to a 48.6% and 41.2% decrease in the average monthly New York Mercantile Exchange (NYMEX) settle price for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011, and a 6.6% and 18.9% decrease in sales volumes for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011. The decrease in sales volumes was mainly due to SJE's exit from the residential market in October 2011 and the significantly warmer weather experienced during the first six months of 2012 as compared with the same period in 2011.

SJE s revenues from retail electric operations, net of intercompany transactions, decreased $15.7 million, or 29.9%, and $25.1 million, or 22.7%, for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $(2.8) million and $(3.2) million, revenues decreased $18.5 million and $28.3 million for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011.

SJRG s revenues from wholesale energy operations, net of intercompany transactions, decreased $6.9 million and $37.5 million for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $1.4 million and $(0.3) million, and adjusting for the change in realized gains and losses on all hedges attributed to inventory injection transactions of $0.1 million and $(0.2) million to align them with the related cost of inventory in the period of withdrawal, SJRG s revenues decreased $5.4 million and $38.0 million for the three and six months ended June 30, 2012, respectively, compared with the same periods in 2011.

Read the The complete Report



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