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Inergy, L.P. Message Board

  • richardleeds richardleeds Nov 30, 2010 12:44 PM Flag

    earnings drop from 93c to 37c

    No matter how one wants to spin this, I would rather own a company where the income is increasing, not taking a hit like this.

    What this does is scare the weak hands and starts analysts down-grading shares.

    My opinion is that the shares go lover over the next three months until we get another quarter of news.

    I would rather put more money into my other major holding, LINN energy. They have started drilling on their two best leases and that will be the case for the next 5 years as they drill their best property holdings, containing natural gas liquids and some oil.

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    • Nrgy has never lowered the Div.They are known for raising the Div. I seriously doubt they will lower the Div.

      • 1 Reply to tricaricodianne
      • It's a race to integrate the new acquisitions and take advantage of the synergies quickly so that the new operations are accretive and fall to the bottom line as the quarter comes to a close.

        Certainly operational challenges and regulatory approval issues have slowed the integration.

        Management bit off quite a piece this time, hopefully they can digest it.

        If they do, this stock will be unique in that it will be high yield and high growth, if not, there will be a few quarters to a year or so of pain.

        Personally, I like what management has done. If it falls here in early 2011, I'll consider it a buying opportunity.

    • The CEO of NRGY has stated that the 4th qtr.earnings represent only 10% of NRGY's annual earnings...He also stated that the DIV. is safe....

    • Dude, how many times has it been mentioned on these MLP boards that you don't pay so much attention to earnings...the important numbers is the DCF. Here is the summary for DCF:

      "Distributable cash flow was $229.6 million for the year ended September 30, 2010, compared to $221.7 million in fiscal 2009, an increase of $7.9 million, or approximately 4%. "

      MLP's have tons of depreciation charges that they take. Couple that with seasonal earnings fluctuations with MLP's that are heavily into retail propane and you get some "losses". Whoopee!!

      Sell me your units. NRGY is better positioned today than they were a year ago for growth going forward...IMO.

      • 1 Reply to cptn_buzzkill
      • I own a ton of MLPs.

        Cash flow is important but you are looking at a total amount.

        The reason this company has been falling is the rest of the company's metrics. Debt has climbed every quarter and number of shares has climbed every quarter.

        Take a look at the financial statements.

        Per share metrics are not as good even though total cash flow is higher.

        Your statement that depreciation is a large number for energy related companies is correct. But the depreciation has existed every quarter and that number is basically unchanged. So you need to concentrate on the other real expenses and items that shoved income down from 93c to 37c.

        Then you might understand why this is dropping. I will not be surprised if it keeps dropping until the next quarter is reported.