Nicor Inc. price up, gas utility sees drop

Naperville-based Nicor Inc., a holding company for Nicor Gas and others, Tuesday posted second-quarter profits that have doubled since last year.

Yet its natural gas utility saw its profit drop and company executives said they could consider seeking a rate increase if that business declines further.

The company also is expected to continue to tighten its belt, said Dave Parker, analyst with Robert W. Baird & Co. Inc.

"Overall, Nicor beat what we expected but the utility's results were disappointing," said Parker. "The bright spot was its wholesale and retail marketing businesses."

Besides Nicor Gas, other business units include Nicor Solutions, Nicor Advanced Energy, Tropical Shipping and others.

Nicor reported second-quarter income of $18 million, or 40 cents per share, compared to $8.5 million, or 19 cents per share, for the same period a year before. Last year's results also included a $10 million charge, worth 22 cents per share, due to a government inquiry.

Second-quarter revenue was $556.9 million, up from $451.3 million the year before.

Nicor Gas reported income of $13.8 million, compared to $16.2 million for the same quarter in 2006. The drop is attributed to the impact of higher natural gas prices and an increase in bad debt, or customers who have not paid their bills, said Mark Knox, Nicor investor relations director.

The company said if the utility's results continue to earn below expectations, they could consider filing for a rate increase with the Illinois Commerce Commission, the state regulatory agency.

"Cost control has been an ongoing part of our corporate culture. Over the years we have found effective ways of reducing our costs, while maintaining customer service and the overall safety and integrity of our system," Knox said. "... It's basically following the philosophy of getting a number of 'base hits' to score 'runs.'æ"