Boston, MA 03/17/2014 (wallstreetpr) – Some companies make money by selling unique products while some make money due to the strategic location of its portfolio. New Jersey Resources Corp (NYSE:NJR) has shown that there is money to be made even in a commodity product like natural gas. It all depends upon how you take advantage of the portfolio and its geographical spread.
Cold winter not yet over:
The temperatures and the unusual weather patterns made news this year. Midwest was particularly affected by the sustained cold weather though most parts of the U.S. experienced unusual cold weather. Demand for natural gas increased substantially and New Jersey Resources Corp (NYSE:NJR) was able to take full benefit of its strategically located natural gas storage and transportation contracts. Due to these reasons the company managed to get better deals in times of high demand and volatility. This was not a one off situation for the company, it has been studying demand patterns as well as the changing dynamics to restructure its portfolio of storage and pipeline capacity. In fact, the cold conditions are far from over. Though the U.S. saw some warm climates, Washington is expecting snow this afternoon. If the cold weather stream blows on, it could mark another period, though a short one, for the company. Also on the horizon, the Ukraine crisis is far from over. This crisis has the potential of disrupting Russian supplies of natural gas and crude to Europe. In such a scenario, Europe will look at American supplies to tide over shortages.
New Jersey Resources Corp (NYSE:NJR) expects that its regulated subsidiary, New Jersey Natural gas, will continue to benefit from customer growth due to new construction as well as conversions. Sandy affected customers are returning back and they would also contribute to increase in demand. The company expects the subsidiary to be the largest contributor in 2014. New Jersey Resources will also be reinvesting the higher than expected earnings into its planned capital programs. As this will save on the cost of debt, the company will benefit from lower interest burden.