Gas Deal Improves Chances of a Rate Hike

Article Excerpt

EMERA INC. $20 (Toronto symbol EMA; SI Rating: Average) stands to gain from a new natural gas supply contract signed by wholly owned subsidiary Nova Scotia Power Inc. The deal should increase Emera’s 2005 profits by about $0.07 a share, to around $1.04 a share. The stock now trades at 19.2 times that figure. The deal should also cut Emera’s 2006 overall fuel costs by $22 million. That’s equal to about 15% of the company’s annual income. However, Emera still plans to ask regulators for a 13% rate hike to cover rising costs for other fuels such as coal and oil, which account for over half of its power output. Emera is a buy. buy…

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