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Profits at Questar reach record high

Natural-gas company ‘off to a good start’ in first quarter, CEO says

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Questar Corp. reported record profit during the year's first quarter, with some business segments seeing huge net income growth while others slipped.

The Salt Lake-based energy company said Wednesday that net income totaled $151.1 million, or $1.72 per share, for the quarter ended March 31. That compares with $137.2 million, or $1.57 per share, in the 2006 first quarter.

The Wall Street consensus expectation was for the company to earn $1.55 per share during the most recent quarter.

"We're off to a good start in 2007," Keith Rattie, Questar chairman, president and chief executive officer, said in a prepared statement.

"Accordingly, we're raising our 2007 production guidance. We're also raising the bottom end of the range for our 2007 earnings guidance, even after adjusting for the likelihood that Rockies natural gas prices will be significantly lower this summer than we had assumed in our previous guidance."

The company reported overall revenues of $872.1 million, down from $911.4 million a year ago and below the $908.2 million Wall Street consensus prediction. That decrease was offset by operating expenses falling from $680.5 million to $632.2 million.

Questar Gas, the regulated retail natural gas distribution services company with 861,000 customers in three states, saw net income fall 1 percent year-over-

year, due mostly to a rate reduction last June. Profit in the first quarter was $29.1 million, down from $29.4 million a year earlier.

Questar Gas had revenues of $406.5 million, down from $466.9 million a year earlier.

The corporation's Questar Market Resources business segment had revenues of $433.9 million, up from $415.1 million last year. QMR contributed $109.5 million to the corporation's net income total, up from $94.7 million a year earlier.

Questar E&P, a QMR subsidiary, saw net income rise from $70.5 million last year to $77.2 million. E&P acquires, explores for, develops and produces natural gas and oil.

QMR subsidiary Wexpro, which develops and produces reserves for Questar Gas, had net income of $263.4 million, up from $214.5 million.

QMR's gas-gathering and processing-services business, Questar Gas Management, saw income rise 28 percent.

Questar Pipeline, a subsidiary involved in interstate natural gas transportation and storage, had a 7 percent drop in net income.

The quarterly results were released after markets closed Wednesday. However, Questar Corp. saw its stock price rise to its highest point in more than a year. The price rose $2.38, or 2.5 percent, to close at $96.33 per share on the New York Stock Exchange. During the past year, the price had ranged from $67.48 to $95.40.

In after-market trading, following the release of the earnings report, Questar shares dropped $1.83, or 1.9 percent, to $94.50.

Questar also said Wednesday that it expects full-year 2007 earnings to be between $5.20 and $5.35 per share. The previous guidance had the low end at $5.15.

E-mail: bwallace@desnews.com