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Spectra Energy’s Q1 Profit Rise Sharply (SEP)

Spectra Energy Partners L.P. (NYSE: SEP), the Houston, Texas-based company engaged in the transportation and gathering of natural gas through interstate pipeline systems, today, released its first-quarter financial results. SEP reported a 7.2% increase in first-quarter profit as revenue and margins improved.

Julie Dill, CEO of Spectra Energy, said that SEP’s portfolio of stable, fee-based assets once again delivered solid results for the quarter and as a result, the company was able to deliver to unitholders its 18th straight quarterly cash distribution increase. Dill said that as natural gas demand increases in the power generation and industrial sectors, SEP’s assets are ideally positioned to connect abundant, clean-burning natural has supplies to customers and markets.

Spectra, which owns pipelines and storage assets in the Southeast, Texas and Ozarks, has seen its earnings rise sharply in recent quarters, partly due to growth through acquisitions. In the latest quarter, SEP benefited from last year’s acquisition of the Big Sandy Pipeline and East Tennessee’s northeastern Tennessee assets. The gains, however, were partially offset by lower revenues at Ozark.

For the first quarter of 2012, Spectra Energy Partners reported a profit of $52.4 million, compared with $48.9 million reported for the same period in the previous year. On a per unit basis, SEP’s profit was $0.48.

Revenue for the quarter rose 21% to $61.9 million.

Analysts surveyed by Thomson Reuters were on average expecting Spectra Energy to report earnings of $0.47 per unit and revenue of $65 million.

Spectra’s operating margin for the quarter improved from 49% to 53.5%.

Spectra Energy shares rose sharply in trading today following the release of first-quarter financial results. The stock rose to an intra-day high of $32.20 before finishing the day 1.08% higher at $31.95 on above average volume of 130,677.

Year-to-date, Spectra Energy shares are down 0.03%, compared with a gain of 8.86% for the S&P 500.


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