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El Paso Guides Earnings Expectations Below Analysts' Consensus

Natural gas producer and pipeline company El Paso said it expects to report a fourth-quarter loss of 25 cents a share and announced it would seek to form a master limited partnership for its pipeline assets.

The company also said it expects to earn 82 to 98 cents a share from continuing operations, excluding one-time items, in 2007. Analysts were expecting a profit of $1.15 a share, according to Thomson Financial.

The fourth-quarter results, due out on February 27, are expected to show a loss of 21 cents a share.

Capital spending for 2007 is estimated to be $2.7 billion, and its oil output should see significant growth in 2008 because of a project in Brazil.

El Paso expects its exploration and production arm to produce between 800 million and 860 million cubic feet of natural gas equivalent per day.

Included in its program is about $610 million of spending for several new pipeline projects, plus $400 million in maintenance capital.

The development of a master limited partnership will enhance the value and flexibility of its pipeline assets, the company said, and provide a lower-cost source of capital for new projects.

MLPs are popular with energy infrastructure and pipeline owners because the partnerships pay no corporate taxes and distribute nearly all their profits to shareholders.