Piedmont Natural Gas Company, Inc. (NYSE: PNY) is one of the few corporations to report earnings this week -- and, judging by its results, that may be a good thing. PNY reported a widened fourth-quarter loss of $13.2 million, or 18 cents per share, while revenue improved by 12% to $311.8 million. Gross margin for the period contracted from 29.1% to 28.1%.
Ahead of the report, analysts were expecting a more modest quarterly loss of about 13 cents per share, according to Thomson Financial. Piedmont's forecast for the next fiscal year also fell short of Wall Street's expectations; the company backed its fiscal 2009 guidance for earnings of $1.55 to $1.65 per share, compared to analysts' consensus estimate for earnings of $1.66 per share.
The unexpectedly wide quarterly loss has PNY shares down about 3% today. However, the stock remains perched atop long-term support from its 10-month moving average. Unlike many commodity issues, PNY is actually on positive ground for 2008, with a year-to-date gain of nearly 20% under its proverbial belt.
Despite its technical resilience, Piedmont has a sizable accumulation of short interest -- 5.5% of its available float is dedicated to short interest, representing 6.4 times its average daily volume. Unfortunately, the firm's less-than-stellar earnings report is hardly the kind of catalyst that could spark an unwinding of these bearish bets. Barring any major positive developments from PNY, these skeptics will likely remain entrenched during the short term.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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