PARIS - French energy company Engie said on Friday first-quarter earnings fell 3.2% because a warmer-than-usual winter depressed demand for natural gas and prices grew less volatile.

The company, which produces, transports and sells gas and electricity, said earnings before interest and tax (EBIT), excluding nuclear, were 3.7 billion euros ($4.02 billion), compared with 3.8 billion euros in the same period of 2023.

"We've started the year pretty well, despite less favourable conditions than last year as the market stabilises, which shows the resilience of our business model," said CFO Pierre-Francois Riolacci.

Profits at oil and gas firms are still retreating from 2022 records, when natural gas prices spiked after Russia invaded Ukraine.

Spot gas prices in Europe have tumbled about 40% in the last year hit by mild winter weather and easing supply worries.

Revenues for the quarter fell 24.6% to 22 billion euros, the company said.

Overall, Engie said it made 136 million euros less across distribution networks and sales, because winter temperatures in France were higher than normal.

Less market volatility also eroded trading opportunities, which had contributed outsized profits in recent years.

Much of the decline was offset by its renewables and flexible generation businesses, however.

The company said it was still targeting an annual net recurring income on a group share basis of between 4.2 billion and 4.8 billion euros.

($1=0.9211 euros)

(Reporting by America Hernandez; Editing by Tassilo Hummel and Clarence Fernandez)

By America Hernandez