Connecticut Energy announces fiscal 1996 earnings.

BRIDGEPORT, Conn.--(BUSINESS WIRE)--Nov. 1, 1996--Connecticut Energy Corp. (NYSE:CNE) today reported record earnings for fiscal 1996 which ended Sept. 30.

Earnings grew to $1.70 per share from $1.60 per share earned in fiscal 1995, an increase of over six percent.

Net income, which also marked a new record high, grew to $15,165,000, up approximately eight percent from last year.

"Fiscal 1996 marks the seventh consecutive year in which we have achieved growth in annual earnings per share," remarked Carol A. Forest, vice president, finance, chief financial officer and treasurer. "We are very proud of this record, which is unmatched by any other gas distribution company in the United States."

"Growth in earnings was accomplished primarily through customer growth and lower operating expenses for our principal subsidiary, The Southern Connecticut Gas Co. (Southern). Southern's on-system gas sales reached an all-time high of 30.7 billion cubic feet (BCF), including record firm services of 22.8 BCF. Gross margins grew to a new high of $119,465,000, and operations and maintenance expenses decreased by over 2 percent from the prior year. Connecticut Energy has succeeded in lowering its operation and maintenance expense as a percentage of margins to 43 percent, an achievement which sets us apart from the rest of the industry," stated Forest.

"During fiscal 1996, Southern continued to add approximately 1900 new residential heating customers and a number of new commercial and industrial customers as well," Forest continued. "Customer growth has been targeted to noncustomers along the existing distribution system as the most cost efficient way to grow."

"In the last year, we have seen significant changes in the natural gas industry and in the regulatory environment in Connecticut," Forest noted. "In anticipation of these changes, Connecticut Energy has developed three new, unregulated subsidiaries in a little over a year. Southern will remain as the anchor for the company's earnings for the near future, however."

"To take advantage of the unregulated opportunities developing rapidly in our industry, our CNE Energy Services Group Inc. subsidiary has developed joint ventures to market a number of energy commodities and services," continued Forest. "In just its first few months of operation, the subsidiary has already contracted with over 300 metered accounts and now has customers throughout New England."

Connecticut Energy's other un-regulated subsidiaries are Connecticut Energy Development Corp., which is involved with large volume natural gas supply purchases, and CNE Venture-Tech Inc., which will participate in ventures offering information technology for utility operations.

Through its predecessor companies, Connecticut Energy has the longest continuous dividend payment record of any nonfinancial company listed on the New York Stock Exchange. It has been paying dividends since 1850. -0-

                              Connecticut Energy Corp.
                                  Principal Items
(Dollars in thousands, except per share)

                        Twelve Months      Three Months(a)
                           Ending              Ending
                      Sept. 30,  Sept. 30,  Sept. 30,  Sept. 30,
                        1996      1995       1996        1995

Revenues             $261,093   $232,093  $ 27,175    $ 23,531
Gross margin         $119,465   $116,510  $ 12,633    $ 11,915
Net income (loss)    $ 15,165   $ 14,060  $ (3,815)   $ (4,611)
Net income (loss)
 per share           $   1.70   $   1.60  $  (0.42)   $  (0.52)
Weighted average
 common
 shares outstanding  8,924,299  8,773,878  8,979,896  8,833,854

(a) Since the company's principal business is natural gas distribution, it is normal to show a loss during the quarter ending in September.

CONTACT: Connecticut Energy Corp., Bridgeport

Judith E. Falango, 203/382-8156