Southwest Gas posts wider loss

Southwest Gas Corp. of Las Vegas reported its second-quarter net loss increased to $2.7 million from $337,000 in the same period last year, but Chief Executive Officer Jeffrey Shaw said he was satisfied with results given the economic downturn.

The loss per share was 6 cents, compared with a loss per share of 1 cent a year ago. The company said it usually records a loss in the second quarter, when gas use is low.

Revenues increased 4.9 percent in the second quarter to $447.3 million.

"Given the current, challenging economic environment, we were encouraged with the overall operating results for the quarter," Shaw said in a statement.

The slump in new construction affected gas utility operations and its Northern Pipeline Construction Co., the company said.

Southwest Gas reported a 1.2 percent increase in additional active meters in Nevada over the last 12 months, bringing the total to 657,000. The company reported 19,000 additional active meters for all three states it serves -- Arizona, California and Nevada -- representing a 1 percent gain.

However, it installed 45,000 first-time meters companywide. The lower amount reflects the "significant" number of vacant homes, Southwest Gas reported.

"Looking ahead, we believe we are poised for improvement when currently vacant homes become occupied (and customers begin taking service) and as the market recovers," Shaw said.

The company expects the Arizona Corporation Commission will grant it a rate increase before the winter heating season and that California will act on a separate rate case by year-end.

Operating margin, operating revenues less the cost of gas sold, grew by 2 percent or $2.6 million in the quarter.

Operating expenses rose 2 percent or $2.4 million because of cost increases, higher uncollectible expenses and added costs for serving additional customers. The company, however, said it enjoyed improved labor efficiencies from use of its electronic meter reading system.

In the 12 months ending in June, the company earned $80.2 million, down from $85.4 million a year ago. Operating revenues grew 2.6 percent to $2.2 million for the 12 months.

Shares of Southwest Gas declined 15 cents, or 0.5 percent, to close at $28.59 on the New York Stock Exchange.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.