Questar Corp. saw its net income fall 52 percent in the third quarter, compared to a year earlier, as natural gas prices dropped.

The Salt Lake-based company on Wednesday reported net income for the third quarter of $98.2 million, or 56 cents per diluted share, compared with 2008 third-quarter earnings of $204.2 million, or $1.16 per share.

Wall Street analysts' consensus expectation was for the company to earn 51 cents per share in the most recent quarter.

"Questar has remained financially strong in 2009 despite a steep decline in natural gas prices over the last year," Keith O. Rattie, chairman, president and chief executive officer of Questar, said in a statement accompanying the earnings report.

Questar Exploration & Production Co. — a subsidiary that acquires, explores for, develops and produces natural gas and oil — saw the biggest earnings drop year over year, falling from $146.8 million to $49.6 million. Questar E&P deferred some activities, curtailed production and shut in some existing wells in response to low natural gas prices during the quarter.

Excluding gains and losses from sales of non-core assets and mark-to-market losses on certain natural gas swaps, Questar net income was 60 cents per share in the third-quarter of 2009. Before interest, taxes, depreciation and amortization, the natural gas company's earnings were $373.7 million. That's an 18 percent decrease from the 2008 third quarter.

Revenues in the third quarter totaled $599.8 million, down from $760 million a year earlier.

"Natural gas prices are likely to improve in 2010, so we intend to get Questar E&P production turned back up in the fourth quarter, and we're gearing up to deliver strong production growth in 2010 and beyond," Rattie said.

Rattie estimated that E&P's production could increase 12 percent to 15 percent annually over the next five years.

Regulated utility Questar Gas Co. had a net loss of $8.1 million in the third quarter, compared with $8.8 million a year earlier. The utility's revenue slipped from $115.2 million to $82.3 million.

Questar Corp.'s earnings were announced after markets closed Tuesday. During the day, its stock price fell 65 cents to close at $39.94. During the past year, the price has ranged from $22.59 to $43.46.

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