El Paso Corp. Earnings Beat Expectations

From Bloomberg News

Energy producer El Paso Corp., which has been accused of driving up the price of natural gas in California, said Monday that second-quarter earnings beat analysts' estimates because of profit from power generation and gas distribution.

Profit from operations was 77 cents to 79 cents a share, Houston-based El Paso said in a statement. It was expected to earn 76 cents, the average estimate of analysts polled by First Call/Thomson Financial. A year earlier, El Paso earned 58 cents.

Increased demand for gas from power generators and more long-term supply contracts boosted profit, spokesman Bruce Connery said.

The company reaffirmed it expects to earn $3.30 a share for the year, though gas prices have fallen. It's forecast to earn $3.34, according to First Call.

The average price of gas on the New York Mercantile Exchange fell 30% to $4.393 per million British thermal units last quarter from the first quarter. The average has risen 64% so far this year from the same period last year.

El Paso was the first company to face a public hearing on charges of manipulating California energy prices. It has been accused of withholding gas to increase prices.

A shortage of gas, hydroelectric power and power plants has caused California's electricity prices to soar in the last year.

Shares of El Paso fell 79 cents to $52.42 on the New York Stock Exchange.

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