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.