QEP Resources spinoff leads to drop in Questar Corp. earnings

SALT LAKE CITY — Questar Corp. on Tuesday reported a second-quarter income of $28.7 million, or 16 cents per diluted share, a drop of 13 percent from the same time last year.

That number takes into account the costs of the June 30 spinoff of QEP Resources Inc. With that $7.1 million charge removed from the equation, Questar Corp. earnings grew 8 percent compared to the same quarter of 2009.

Without the charge, Questar earned $35.8 million, or 20 cents per share, if all options are counted as shares, according to Questar spokesman Samuel Brothwell.

"All business units are performing in line with or ahead of our expectations," Ron W. Jibson, Questar president and chief executive officer, said in a news release. "We're pleased to have successfully completed the spinoff of QEP Resources to our shareholders, and our team is now focused on delivering the growth we described in recent investor presentations."

For the quarter that ended June 30, earnings from five Questar companies were listed. Starting July 1, the only companies that are part of Questar Corp. are Wexpro, a drilling and exploration arm; Questar Pipeline, a service that buys, sells and transfers natural gas on the open market; and Questar Gas, the public utility that serves customers in Utah, Wyoming and Idaho.

For the first half of this year, Wexpro net income was $43.2 million, compared to $38.6 million in the first six months of 2009. The income was driven by a higher average investment base, according to the company news release.

Questar Pipeline grew net income 6 percent to $15.9 million in the second quarter of 2010, compared to $15 million in the second quarter of 2009.

Questar Gas reported a seasonal loss of $2.2 million in the second quarter of 2010, compared to a net loss of $2 million in the same period a year ago.

On June 30, Questar Gas served 905,745 customers, up about 15,500 from the same date in 2009.

Also during that time, Questar requested and received approval from Utah's Public Service Commission for a rate increase for infrastructure costs, bringing its allowed return on equity to 10.35 percent.

Questar announced its earnings after markets closed Tuesday. Its stock price on the New York Stock Exchange fell 1 cent to $17.20 per share in regular trading Tuesday. The price has fluctuated between $14.86 and $52.55 over the past year.

e-mail: rpalmer@desnews.com