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Williams 4Q Profit Falls on Charges

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TULSA, Okla. (AP) _ Natural gas producer Williams Cos. on Tuesday said profit dropped 9 percent in a fourth quarter marked by litigation costs and impairment charges.

Earnings fell to $66.8 million, or 11 cents per share, from $73.4 million, or 13 cents per share, in the 2004 quarter.

The decline is largely due to $64 million in litigation accruals from resolving gas reporting issues and $61 million in impairment charges from two equity investments, Williams said. Last week, Williams agreed to pay a fine and accept responsibility for two employees who manipulated gas prices between 1998 and 2002.

Williams said recurring income from continuing operations, which excludes the effect of using mark-to-market accounting on the company's hedging and derivatives positions, was $154.3 million, or 26 cents per share, compared with $51 million, or 9 cents per share, a year ago.

Quarterly revenue grew to $3.67 billion from $2.96 billion a year ago.

Analysts polled by Thomson Financial were looking for earnings excluding items of 31 cents per share and sales of $3.51 billion.

The company's shares dipped 68 cents, or 3 percent, to $21.45 in midday trading on the New York Stock Exchange. Shares have traded between $15.62 and $25.72 over the past year.

Boosted by increased production and higher prices, full-year earnings rose to $313.6 million, or 53 cents per share, from $163.7 million, or 31 cents per share, in 2004. Revenue edged higher in 2005 to $12.58 billion from $12.46 billion in 2004.

Separately, the company reported its proved natural gas and oil reserves increased by 603 billion cubic feet to 3.6 trillion cubic feet of equivalent, boosted largely by additions to U.S. natural gas reserves. Average daily production in the U.S. and abroad rose 17 percent to 662 million cubic feet of gas equivalent.

Looking ahead, Williams forecast consolidated segment profit of $1.52 billion to $1.86 billion, with per-share earnings ranging from 78 cents to $1.03 in 2006. The forecast includes only recurring operations and is adjusted for the effect of mark-to-market accounting.

Analysts forecast 2006 profit of $1.18 per share.
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