Piedmont Natural Gas Sees 6% Jump in Second-Quarter Profit, Full-Year Capex Now Set at $565 Million

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Researched by Industrial Info Resources (Sugar Land, Texas)--Propelled by rate increases in Tennessee and North Carolina, as well as customer growth, natural gas services provider Piedmont Natural Gas Company Incorporated (NYSE:PNY) (Charlotte) reported second-quarter net income of $66.4 million, up 6% from $62.5 million in the same period last year. Also during the fiscal quarter ended April 30, the cost of natural gas fell 21% from a year earlier to $199 million.

Second-quarter operating revenues totaled, $425 million, down from $462 million in the second quarter of 2014.

The situation marks a positive change for Piedmont, which had reported a 4.71% decrease in net income during the first quarter from a year earlier. For related information, see March 10, 2015, article - Heavy Costs Clog Piedmont Natural Gas in First-Quarter 2015, Full-Year Capex Reduced to $585 Million.

Industrial Info is tracking three active Piedmont projects with a total investment value of $48 million. The company is planning construction of a natural gas compressor station and pipeline in Anderson County, South Carolina. The grassroot pipeline would move up to 75 million standard cubic feet per day of natural gas about 1.5 miles from the compressor station in Pelzer to Duke Energy Corporation's (NYSE:DUK) (Charlotte, North Carolina) W.S. Lee power generation station. The compressor station has a total investment value of $18 million and the pipeline has a value of $20 million. Both projects would kick off on the first quarter of 2017 and see completion in the second quarter of that year.

Piedmont provides natural gas for more than 1 million residential and business customers in North Carolina, South Carolina and Tennessee.

Chief Executive Officer Thomas Skains said during the company's earnings conference call that Piedmont added 8,503 customers during the second quarter.

Also, the company benefited from integrity management rider (IMR) rate adjustments in Tennessee and North Carolina, according to Chief Financial Officer Karl Newlin.

Full-year capital expenditures are now expected to total $565 million, including $270 million for systems integrity expenditures, Skains said.

Piedmont plans to spend $65 million this year on two major pipeline joint venture projects.

The Constitution Pipeline System will carry up to 650 million standard cubic feet per day of natural gas from northeastern Pennsylvania to New York and New England. It is owned by subsidiaries of Williams Partners LP (NYSE:WPZ) (Tulsa, Oklahoma), Cabot Oil & Gas Corporation (NYSE:COG) (Houston, Texas), WGL Holdings Incorporated (NYSE:WGL) (Washington, D.C.) and Piedmont. The project is set to kick off in the third quarter of this year, with completion in the second quarter of 2016.

For more information, see December 4, 2014, article - Constitution Natural Gas Pipeline Receives FERC Approval.

Piedmont also has a 10% stake in the 550-mile Atlantic Coast Pipeline, which would bring up to 1.5 billion cubic feet of gas per day (BCF/d) from the Marcellus and Utica shale formations to power plants, homes and businesses in North Carolina and Virginia. Other stakeholders include Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia), Duke Energy and AGL Resources Incorporated (NYSE:GAS) (Atlanta, Georgia). Kickoff is set for first-quarter 2017, with completion in fourth-quarter 2018.

For related information, see February 9, 2015, article - Race is on to Build Pipelines to Bring Gas from Marcellus and Utica Shales to Market.

Piedmont plans to increase capex to $150 million for the two joint ventures next year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.