Spectra Opens the Profit Valve

Those who ignore history are destined to repeat it. Those who study history and find something they like, though, may just want to repeat it anyway.

Throughout the remarkable run that crude oil has had in recent years, from $40 to more than $120 per barrel, the companies that produce the commodity were not the only huge winners. Companies involved in a series of related services, including giant Schlumberger (NYSE: SLB  ) , have also made their mark.

Now that oil is this expensive, all fossil fuels appear poised to join the commodities boom. Coal has dominated the spotlight in recent weeks with companies like Arch Coal (NYSE: ACI  ) issuing bullish guidance, but natural gas has been steadily building momentum all the while.

Spectra Energy (NYSE: SE  ) , the natural gas infrastructure play that emerged in 2006 as a spinoff from Duke Energy (NYSE: DUK  ) , revealed some impressive earnings Tuesday that lend credence to the emerging natural gas boom. The company increased profits by 56% year over year to $367 million. Every business segment improved in the first quarter, with the field services unit delivering the highest operating income growth -- 134% -- up to $192 million.

Spectra projects further strength and is backing up the rhetoric by increasing its substantial dividend again and announcing a $600 million share-repurchase program. Because company officials see increased reliance on natural gas for electricity generation, they said plans are to outperform the initial earnings target of $1.56 per share for 2008. Given the demand for the gaseous fuel, I see a spectacular future for Spectra Energy.

For further Foolishness:

Read/Post Comments (0) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 639892, ~/Articles/ArticleHandler.aspx, 10/27/2016 10:36:44 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 hour ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
SE $42.71 Up +0.51 +1.21%
Spectra Energy CAPS Rating: *****
ACIIQ $0.00 Down +0.00 +0.00%
Arch Coal, Inc. CAPS Rating: *
DUK $78.42 Down -0.35 -0.44%
Duke Energy CAPS Rating: ***
SLB $79.60 Down -0.42 -0.52%
Schlumberger CAPS Rating: ****