DOW JONES NEWSWIRES
OGE Energy Corp.'s (OGE) fourth-quarter net income slid 42% on
sharply higher interest costs as the energy holding company saw
lower revenue at its electric utility despite increased power
demand.
The news comes a day after OGE and Energy Transfer Partners LP
(ETP) announced they ended a joint-venture deal to combine their
natural-gas pipeline businesses.
The deal was announced in September, but since then economic
conditions have worsened considerably and significant uncertainty
remains in the capital markets. As such, the companies said late
Thursday that it is "unfeasible to complete" the venture's
formation "at this time."
OGE Chairman and Chief Executive Pete Delaney said the company
intends "to revisit the possibility of a partnership again when
conditions are more favorable."
The company, which also operates the Oklahoma Gas & Electric
utility, reported fourth-quarter net income of $21.8 million, or 23
cents a share, compared with $37.6 million, or 41 cents a share, a
year earlier. The latest results including a six-cent charge
related to the Enogex pipeline business.
Revenue dropped 28% as pipeline revenue slumped 40% on the drop
in natural gas prices, but electric-utility revenue declined 14% on
broad-based weakness.
Gross margin increased to 40.2% from 28% despite lower margins
at Enogex. But the overall margin gain was more than offset by
interest costs which more than doubled.
Enogex reported a 57% slide in profit as per-gallon sales
margins fell 45%.
Shares of OGE, which reiterated its 2009 forecast, closed
Thursday at $24.53 and there was no premarket trading.
-By Kevin Kingsbury and Katherine E. Wegert, Dow Jones
Newswires; 201-938-2136; kevin.kingsbury@dowjones.com