Connecticut Energy announces second quarter earnings.

BRIDGEPORT, CT--(BUSINESS WIRE)--April 30, 1997--Connecticut Energy Corp. (NYSE-CNE) today reported earnings for the three months ended March 31, 1997 of $1.67 per share, up two percent from the same period last year. Earnings for the first six months of fiscal year 1997 were $2.28 per share, up three percent from the first half of fiscal year 1996.

"The continued stable growth in earnings is primarily the result of stringent cost management and improved operating efficiency," according to Carol A. Forest, the company's chief financial officer. "Total operating expenses were down one percent for the first half of fiscal year 1997 and down six percent for the most recent quarter."

"The increased productivity that has resulted in cost reductions, combined with a one percent profitable growth derived from our firm customer base, will enhance financial performance in the second half of fiscal year 1997 and future years." Forest continued. "Based on these factors, the company continues to feel comfortable that earnings for fiscal year 1997 are in line with the current range of analysts' expectations."

"Although weather for the quarter ended March 31, 1997 was 12 percent warmer than the same period last year, this did not have an impact on margins because the company's principal subsidiary, The Southern Connecticut Gas Company (Southern), benefits from a Weather Normalization Adjustment," continued Forest. "The reported variance in margins resulted primarily from the accrual for unbilled revenues. Southern estimates gas consumed but not yet billed at the end of each month, including an estimated adjustment for weather. These differences in estimates created a timing difference, which will be reversed in subsequent periods."

Connecticut Energy Corp. is a holding company primarily engaged in the retail distribution of natural gas through Southern, which delivers natural gas in 22 Connecticut communities to over 156,000 customers. Through its subsidiary, CNE Energy Services Group Inc., the company also provides an array of energy products and services to commercial and industrial customers throughout New England, from installation and maintenance of equipment to procuring the most cost effective energy commodity. The company also participates in a natural gas purchasing cooperative through another subsidiary, CNE Development Corp., and has recently formed a third unregulated subsidiary, CNE Venture-Tech Inc., to seek investment opportunities in information technology related to utility operations.

This press release contains forward looking statements about the projected financial performance of Connecticut Energy Corp. While the company believes such statements to be reasonable at the date of this press release and makes them in good faith, Connecticut Energy cautions that they may vary from actual results. Investors should be aware of important factors that could have a material impact on future results, such as the availability and terms of capital; competition for energy services; actions by federal and state regulatory authorities, legislative and judicial developments which affect the company or significant groups of its customers; and other uncertainties. -0-

CONNECTICUT ENERGY CORPORATION
Principal Items
(Dollars in thousands, except per share)

                         Three Months            Six Months
                             Ended                  Ended
                       Mar. 31    Mar. 31     Mar. 31    Mar. 31
                        1997        1996       1997       1996

Operating Revenues  $ 106,866   $ 120,189   $ 181,739  $ 189,964
Gross Margin        $  51,130   $  53,423   $  85,694  $  85,705
Net Income          $  15,211   $  14,635   $  20,620  $  19,664
Net Income per share  $  1.67   $    1.64   $    2.28  $    2.21
Weighted Average
  Common Shares
  Outstanding           9,085       8,904       9,050      8,887

CONTACT: Connecticut Energy Corporation

Judith E. Falango, 203/382-8156