El Paso Quarterly Loss More Than $1 Billion

El Paso Corp. on Wednesday reported a second-quarter loss of more than $1 billion after big charges from asset sales.

The company also offered a projection of operating results for all of 2003 that was far below Wall Street estimates because of lower natural gas production.

Shares of the largest U.S. natural gas pipeline operator, whose second-quarter results before charges came in well short of Wall Street estimates, fell 6.1%.

“The net effect of what they’ve done in terms of sizing themselves down has shrunk the company perhaps, on an ongoing basis, a little more than people expected,” said James Halloran, a fund manager with National City Wealth Management Services, which owns El Paso shares.

El Paso, which is trying to reduce billions in debt without selling its best cash-producing assets, said its second-quarter net loss widened to $1.19 billion, or $1.99 share, from $45 million, or 8 cents, a year earlier.

The chief components of the loss were an $836 million write-down, largely because of a decision to sell a refinery in Aruba, and $264 million in charges to reflect the impairment of telecommunications assets and the settlement of litigation from the California energy crisis.

Excluding one-time items, the company posted a loss of a penny per share. Wall Street analysts on average expected a 14-cent profit, according to Reuters Research.

For 2003, El Paso said it expects a loss of $2.35 to $2.65 a share, assuming no additional big charges and break-even results for operations discontinued as part of its plan to substantially trim its balance sheet.

El Paso said earnings from continuing operations would range from 15 cents to 45 cents a share, because of lower oil and gas production, high natural gas prices and greater-than-expected losses from energy trading.

Analysts on average had been projecting a 78-cent profit, according to Reuters Research.

Shares of El Paso closed down 45 cents at $6.95 on the New York Stock Exchange.