Under any reasonable assessment, Houston-based El Paso Corporation has had a rough past year, as noted here, here, here, here and here.
Accordingly, it was with some relief in local business circles that the natural gas production and pipeline company was able to report yesterday that it had swung to profitability in the first quarter from a net loss a year ago. El Paso reported net income of $106 million, or 17 cents a share, compared with a net loss of $206 million, or 32 cents a share, in the first quarter of 2004. However, revenue dropped by 22% to $1.21 billion from $1.56 billion a year ago and cash flow from operations dropped by over 90% to $51 million from $629 million in the prior-year period. As a result, El Paso’s stock price fell 34 cents, or 3.2%, to $10.21 per share as of the close of yesterday’s trading.
El Paso is not out of the woods financially by any means, but its latest report reflects that the company is taking the steps necessary to hedge the risk of having to endure a formal corporate reorganization. Stay tuned.