Article for Medill: NiSource Inc. gets slammed

A colder than usual year and sinking interest expense helped NiSource Inc.’s earnings leap ahead for the quarter ended Dec. 31, but earnings for all of 2003 dropped a whopping 77 percent from the previous year’s earnings due mostly to the sale of discontinued operations assets.

“They took a beating on what they sold,” said Jim Halloren, an analyst with NatCity Investments.

NiSource earned $139.8 million, or 54 cents per share, for the quarter ended Dec. 31. That was up 70 percent from the $82.1 million, or 36 cents per share, earned in the same period a year ago.

The consensus earnings estimate of analysts polled by was 56 cents per share for the quarter, 2 cents above the actual earnings per share.

Revenues hit $1.7 billion for the quarter, compared with $1.7 billion.

NiSource earned $85.2 million, or 33 cents per share, for the year ended Dec. 31, down 77 percent from the $372.5 million, or $1.77 per share, earned in 2002.

Revenues rose to $6.2 billion for the year compared with $5.3 billion.

“They did a good job on paying down debts and holding the line on costs,” said Michael C. Heim, an equity analyst with A.G. Edwards & Sons. “It’s been a good turnaround story as a whole.”

Earnings per share for 2004 are estimated to be $1.65 to $1.70, said Gary Neale, chairman, president and chief executive officer of NiSource, during a conference call with analysts.

“January has been a cold month with strong natural gas sales,” Neale added. “This gives us a good start for the year.”

NiSource is an Indiana-based holding company with natural gas and electricity transmission, storage and distribution businesses serving about 3.7 million customers.

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