Enbridge offers 2009 guidance above Street views

NEW YORK - Canadian oil and gas pipeline company Enbridge Inc. on Wednesday offered 2009 guidance in a range that tops Wall Street expectations, saying it expects a "very favorable financial performance next year."

The Calgary, Alberta, company said it expects to earn between $2.18 to $2.32 Canadian ($1.75 to $1.86) per share in 2009.

Analysts polled by Thomson Reuters, on average, were expecting profit of $2.17 ($1.74) per share, with estimates ranging from $2.05 to $2.32 Canadian ($1.65 to $1.86).

Patrick D. Daniel, president and chief executive, said the outlook reflects "strong performance from the company's core business operations, which are largely unaffected by the current financial market turmoil and are not directly tied to oil and gas prices."

Enbridge also expects to benefit from the stronger U.S. dollar and its increased ownership interest in Enbridge Energy Partners LP, a Houston-based pipeline company. Last month, Enbridge increased its ownership stake in the partnership to 27 percent from 15 percent.

In a conference call to discuss the guidance, Daniel said the company carries little or no volume risk because of the way 80 percent of its contracts are structured. In addition, more than 95 percent of its earnings are from regulated businesses, and its hedging policies protect it from market price volatility. "So when you see the price of crude oil falling off sharply, you don't need to be concerned with your Enbridge investment," he said.

Daniel also noted that almost 95 percent of Enbridge's business is with large energy and industrial companies like Exxon, BP, Shell and Sun Corp., which limits its credit risk.

Chief Financial Officer Richard Bird added that all segments of Enbridge's business are expected to strengthen in 2009, in particular its liquid pipelines business, which will benefit from projects completed this year and additional projects that will be finished next year.

Gas distribution and services earnings "should be up by a healthy amount," Bird said, reflecting a combination of stronger gas distribution earnings under incentive regulation, and a stronger contribution from energy services businesses.

Enbridge shares rose 86 cents, or 3 percent, to close at $30.06.

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