WGL Holdings shares down on 3Q loss

The stock lost $1.66, or 4.8 percent, to $33 in afternoon trading.

Goldman Sachs analyst Michael Lapides said a negative outlook for the company's non-regulated retail segment played out in its fiscal 2008 third quarter, as weather volatility impacted electric supply availability and negatively impacted margins.

Lapides maintains a "Sell" rating on the company with a price target of $27. That implies a decline of 22.1 percent from its closing price Monday of $34.66.

"We expect the shares to underperform today given the lower-than-expected quarterly results and earnings guidance, and relatively expensive valuation and YTD outperformance versus peers," Lapides said in a client note.

Washington, D.C.-based WGL Holdings late Monday reported a loss of $492,000, or 1 cent per share, in the third quarter, compared with profit of $13 million, or 26 cents per share, in the year-ago quarter, as June weather lowered gross margins and reduced retail-energy marketing earnings.

The parent of Washington Gas Light Company said its adjusted earnings for the quarter were $3.15 million, or 6 cents per share, which excludes the effects of warmer- or colder-than-normal weather for its regulated utility segment, certain unusual transactions and unrealized mark-to-market gains or losses on energy-related derivatives.

Analysts surveyed by Thomson Financial, on average, expected a higher adjusted profit of 14 cents per share.

Revenue fell to $464.6 million from $467.5 in the year-ago period.

The company said its business is seasonal and it expects new rates and customer growth to sharply improve year-to-date utility earnings.