XTO Energy Inc.'s (XTO) first-quarter earnings fell 32% as the natural-gas
producer was hurt by lower prices during what was likely its last quarter as an
independent company. Still, profit beat analysts' expectations.
The industry has seen natural-gas production and inventories continue to rise
despite weak prices as major energy companies rush into alternative shale-gas
plays in the U.S. Exxon Mobil Corp.'s (XOM) was among the first major global
oil companies to enter the sector, with its pending $28 billion acquisition of
XTO expected to close in this quarter. Still weak gas prices have some
companies leaning more on their oil and natural-gas liquids operations, where
prices have strengthened.
XTO reported a profit of $330 million, or 56 cents a share, down from $486
million, or 83 cents a share, a year earlier. Excluding items such as
prior-year derivatives write-downs, earnings dropped to 55 cents from 91 cents
as revenue decreased 7.4% to $2 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of 48 cents
on revenue of $1.95 billion.
Average daily gas production rose 8%, but average prices were down 12%.
While revenue fell, costs rose 5.1% in part on higher depreciation and
amortization expenses.
Shares
closed Tuesday at $46.60 and were inactive premarket.