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ONE Gas posts earnings gains in Q1 after Texas, Okla. rate increases

on May 2 reportedfirst-quarter net income of $64.7 million, or $1.22 per share, compared to$60.4 million, or $1.13 per share, in the year-ago quarter.

The S&PCapital IQ consensus normalized EPS estimate for the first quarter was $1.20,with five analysts reporting.

First-quarteroperating income was $116.1 million, compared to $109.0 million in the sameperiod of 2015.

Net marginincreased by $9.6 million year over year. New rates in Oklahoma and Texasbrought in an additional $13.8 million, while ONE Gas reported a $2.8 milliondecrease from lower sales volumes from warmer weather and a $1.9 milliondecrease from lower transportation volumes in Kansas and Oklahoma.

Capitalexpenditures for the first quarter totaled $75.3 million, compared to $54.9million in the prior-year quarter.

ONE Gasended the first quarter with $52.7 million of cash and cash equivalents, noshort-term borrowings, and $1 million in letters of credit, which leaves $699million of credit available under its $700 million credit facility, accordingto the earnings release. The total debt-to-capitalization ratio at March 31 was39%.

The company's2016 financial guidance was reaffirmed, with net income forecast at $127million to $137 million, or $2.40 per share to $2.60 per share. CapEx isexpected to be about $305 million in 2016, with 70% planned for systemintegrity and replacement projects.