Piedmont Natural Gas announced results for its second fiscal quarter ended April 30, 2016. The company reported net income of $63.4 million, or $0.78 per diluted share.
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This compares to net income of $66.4 million, or $0.84 per diluted share, for the same period in 2015. Adjusted for merger-related expenses incurred during the company's second quarter, net income was $64.1 million, or $0.79 per diluted share.
For the six months ended April 30, 2016, net income was $161.2 million and diluted earnings per share were $1.98, compared with net income of $159. million and diluted earnings per share of $2.02 for the same period in 2015.
Adjusted for merger-related expenses incurred during the company's six months ended April 30, 2016, net income was $169.1 million, or $2.08 per diluted share.
Margin for the quarter was $224.4 million, a decrease of $1.3 million from the same period in 2015. The decrease in the three month period is primarily attributable to lower margin sales from secondary market activity and warmer weather, partially offset by integrity management rider (IMR) rate adjustments in North Carolina and Tennessee and customer growth.
Margin for the six months ended April 30, 2016 was $510.6 million, an increase of $14.9 million from the same period in 2015.
The increase is primarily attributable to IMR rate adjustments in North Carolina and Tennessee and customer growth, partially offset by lower margin sales from secondary market activity and warmer weather.
Operation and maintenance (O&M) expenses totaled $75.5 million during the second quarter of 2016, an increase of $4.1 million from the same quarter in 2015. O&M expenses totaled $146.8 million during the six months ended April 30, 2016, an increase of $9.2 million from the same period in 2015. The increase in O&M expenses for the quarter is primarily due to increases in payroll and contract labor, partially offset by a decrease in employee benefits.
The increase for the six month period is primarily due to increases in payroll and $5.5 million incremental expense from the acceleration and payment of certain equity incentive awards in connection with the proposed Duke Energy acquisition and $2.1 million integration expenses related to the Duke Energy acquisition.
Pre-tax income from Piedmont's joint ventures decreased 7.9% for the quarter compared to the same period in 2015 due to a decrease in SouthStar's income from lower customer usage due to warmer weather and lower value of hedged derivatives, partially offset by lower operating expenses.
Pre-tax income from Piedmont's joint ventures decreased 1.3% for the six months ended April 30, 2016 compared to the same period in 2015 due to the same factors discussed for SouthStar for the quarter that were partially offset by an increase in ACP's income due to higher capitalized interest expense and lower outreach cost.
Utility interest charges for the quarter were $16.6 million compared to $18.1 million for the same period in 2015. Utility interest charges for the six months ended April 30, 2016 were $33.7 million compared to $35.8 million for the same period in 2015.
The decreases in utility interest charges for both periods is primarily due to recording interest income on net amounts due from customers compared with interest expense due to customers in the prior periods, partially offset by additional interest from an increase in long-term debt outstanding in 2016.
At the company's regular quarterly meeting of its board held June 7, 2016, a quarterly dividend on Common Stock of 34 cents per share was declared, payable on July 15, 2016 to holders of record at the close of business on June 24, 2016. ■