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The utility lost $8.3 million, or 18 cents a share, in the third quarter, down from $16.7 million, or 38 cents a share, in the same quarter of 2008.
The results beat analysts' loss estimates, which Hoover's pegged at 37 cents per share. Company revenue also fell year over year in the quarter, from $374.4 million to $317.5 million. It's common for Southwest Gas to post losses in the warmer second and third quarters, when consumers don't need to heat their homes.
Southwest Gas Chief Executive Officer Jeffrey Shaw credited the narrower loss to improved investment returns, as well as hiring slowdowns and efficiencies from new technologies. Shaw also said slowed population growth has encouraged the company to cut capital expenditures, or dollars spent on new projects for gas production and distribution.
The utility's earnings statement took note of its recently completed general rate case, which company officials said would add $19.1 million to operating income. But consumers won't notice the 4 percent jump in rates that cover operating costs, because separate rate cases involving plummeting natural-gas prices more than canceled out that increase. The overall impact was a 2.5 percent drop in monthly winter gas bills, which will go from an average of $74.41 to $72.56. The rates took effect Sunday.
In setting the new rates, the state Public Utilities Commission also decoupled Southwest Gas' rates, allowing the utility to separate the cost of gas from the sale of gas.
Shaw said decoupling will allow Southwest Gas to pursue conservation efforts without feeling the full financial effects of lower use.
Because decoupling reduces risk for Southwest Gas, the Public Utilities Commission pared the utility's maximum allowed return on investment from 10.5 percent to 10.2 percent.
Southwest Gas released its earnings after financial markets closed Thursday. The company's shares rose 72 cents, or 2.9 percent, to close at $25.87 on t he New York Stock Exchange.
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.
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