Chesapeake Utilities Corp. (CPK, Financial) filed Quarterly Report for the period ended 2010-06-30.
Chesapeake Utilities Corp. has a market cap of $324 million; its shares were traded at around $34.25 with a P/E ratio of 14.1 and P/S ratio of 1.2. The dividend yield of Chesapeake Utilities Corp. stocks is 3.9%. Chesapeake Utilities Corp. had an annual average earning growth of 2% over the past 10 years.CPK is in the portfolios of Jim Simons of Renaissance Technologies LLC.
During the second quarter of 2010 and 2009, we expensed approximately $92,000 ($55,000 net of tax) and $1.1 million ($654,000 net of tax), respectively, of merger-related transaction costs, which are included in the Other segment. Transaction-related costs expensed in the second quarter of 2010 reflected our costs to integrate operations of Chesapeake and FPU, including certain termination benefits offered to employees, net of the portion we expect to recover through future rates when we complete the appropriate rate proceedings. Transaction-related costs expensed in the second quarter of 2009 included our costs to consummate the merger.
Growth. The average number of Delmarva natural gas residential customers increased by one percent in the second quarter of 2010, compared to the same period in 2009. This growth and an increase in commercial and industrial customers contributed approximately $256,000 in period-over-period additional gross margin. Although not affecting the results in the second quarter of 2010, we entered into agreements in 2010 to provide natural gas service to two industrial customers in southern Delaware, which will add annual margin equivalent to 1,575 average residential heating customers once the services begin in the fourth quarter of 2010 and early 2011. New transportation services and new expansion facilities placed in service during 2009 and 2010 by our natural gas transmission subsidiary, ESNG, contributed an additional gross margin of $370,000 in the second quarter of 2010 compared to the same period in 2009. Chesapeakes Florida natural gas distribution division experienced a period-over-period net customer loss, primarily from the loss of several large industrial customers as a result of plant closings in 2009, which decreased gross margin by $25,000.
Rates and Regulatory Matters. In December 2009, the Florida PSC approved a rate increase of approximately $2.5 million, applicable to all meters read on or after January 14, 2010, for Chesapeakes Florida natural gas distribution division. The rate increase contributed an additional gross margin of $574,000 in the second quarter of 2010 compared to the same period in 2009. The operating results of FPUs natural gas distribution operation for the second quarter of 2010 also reflect an increase of $1.3 million in gross margin from its rate increase of approximately $8.0 million approved by the Florida PSC in 2009.
Propane Prices. During the first half of 2009, our Delmarva propane distribution operation experienced higher retail margins benefited from the $939,000 loss recorded in late 2008 on a swap agreement for the 2008/2009 winter Pro-Cap (propane price cap) program. This loss lowered the propane inventory costs and, therefore, increased retail margins during the first half of 2009. During the first half of 2010, the retail margins returned to more normal levels, and it resulted in a lower gross margin per gallon in the second quarter of 2010 compared to the same period in 2009, which decreased gross margin by $290,000. Lower trading volumes in the wholesale propane market have led to greater uncertainty, reducing Xerons trading activity and its gross margin by $225,000.
Advanced Information Services. Our advanced information services subsidiary, BravePoint, generated $230,000 in operating income in the second quarter of 2010, compared to an operating loss of $240,000 reported in the same period of 2009. Increased billable consulting hours in 2010 and cost containment actions implemented throughout 2009 contributed to the increased period-over-period operating results.
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Chesapeake Utilities Corp. has a market cap of $324 million; its shares were traded at around $34.25 with a P/E ratio of 14.1 and P/S ratio of 1.2. The dividend yield of Chesapeake Utilities Corp. stocks is 3.9%. Chesapeake Utilities Corp. had an annual average earning growth of 2% over the past 10 years.CPK is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Our net income for the quarter ended June 30, 2010 was $3.3 million, or $0.35 per share (diluted). This represents an increase of $2.5 million, or $0.23 per share (diluted), compared to a net income of $806,000, or $0.12 per share (diluted), reported in the same period in 2009.During the second quarter of 2010 and 2009, we expensed approximately $92,000 ($55,000 net of tax) and $1.1 million ($654,000 net of tax), respectively, of merger-related transaction costs, which are included in the Other segment. Transaction-related costs expensed in the second quarter of 2010 reflected our costs to integrate operations of Chesapeake and FPU, including certain termination benefits offered to employees, net of the portion we expect to recover through future rates when we complete the appropriate rate proceedings. Transaction-related costs expensed in the second quarter of 2009 included our costs to consummate the merger.
Growth. The average number of Delmarva natural gas residential customers increased by one percent in the second quarter of 2010, compared to the same period in 2009. This growth and an increase in commercial and industrial customers contributed approximately $256,000 in period-over-period additional gross margin. Although not affecting the results in the second quarter of 2010, we entered into agreements in 2010 to provide natural gas service to two industrial customers in southern Delaware, which will add annual margin equivalent to 1,575 average residential heating customers once the services begin in the fourth quarter of 2010 and early 2011. New transportation services and new expansion facilities placed in service during 2009 and 2010 by our natural gas transmission subsidiary, ESNG, contributed an additional gross margin of $370,000 in the second quarter of 2010 compared to the same period in 2009. Chesapeakes Florida natural gas distribution division experienced a period-over-period net customer loss, primarily from the loss of several large industrial customers as a result of plant closings in 2009, which decreased gross margin by $25,000.
Rates and Regulatory Matters. In December 2009, the Florida PSC approved a rate increase of approximately $2.5 million, applicable to all meters read on or after January 14, 2010, for Chesapeakes Florida natural gas distribution division. The rate increase contributed an additional gross margin of $574,000 in the second quarter of 2010 compared to the same period in 2009. The operating results of FPUs natural gas distribution operation for the second quarter of 2010 also reflect an increase of $1.3 million in gross margin from its rate increase of approximately $8.0 million approved by the Florida PSC in 2009.
Propane Prices. During the first half of 2009, our Delmarva propane distribution operation experienced higher retail margins benefited from the $939,000 loss recorded in late 2008 on a swap agreement for the 2008/2009 winter Pro-Cap (propane price cap) program. This loss lowered the propane inventory costs and, therefore, increased retail margins during the first half of 2009. During the first half of 2010, the retail margins returned to more normal levels, and it resulted in a lower gross margin per gallon in the second quarter of 2010 compared to the same period in 2009, which decreased gross margin by $290,000. Lower trading volumes in the wholesale propane market have led to greater uncertainty, reducing Xerons trading activity and its gross margin by $225,000.
Advanced Information Services. Our advanced information services subsidiary, BravePoint, generated $230,000 in operating income in the second quarter of 2010, compared to an operating loss of $240,000 reported in the same period of 2009. Increased billable consulting hours in 2010 and cost containment actions implemented throughout 2009 contributed to the increased period-over-period operating results.
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