Ferrellgas Partners LP (FGP) reported earnings per unit of 73 cents for the second quarter of fiscal 2013, ending Jan 31, down 8.8% from the Zacks Consensus Estimate of 80 cents. However, the quarter’s earnings were substantially higher than the prior-year figure of 47 cents.
Total Revenue
Ferrellgas Partners' total revenue of $658.9 million in the quarter was 20.5% lower than $829.3 million reported in the comparable year-ago period.
The results were in line with the Zacks Consensus Estimate of $659 million.
The lower wholesale propane price impacted propane and other gas liquids sales, which decreased 25.2% to $583.1 million while Other revenue increased 52.5% to $75.8 million.
Operating Highlights
Lower propane price boosted the gross profit of the partnership in the reported quarter. Ferrellgas Partners' gross profit during the quarter increased 15% from the comparable quarter last year to $235.2 million.
Operating income in the reported quarter was $82.1 million, up 33.5% from $61.5 million reported in the prior-year period.
The low cost of borrowing benefited the partnership. Interest expenses decreased 6.2% to $22.7 million.
Financial Highlights
Cash and cash equivalents as of Jan 31, 2013, were $12.1 million versus $8.4 million as of Jul 31, 2012.
The partnership's long-term debt as of Jan 31, 2013, was $1.08 billion, increasing from $1.05 billion as of Jul 31, 2012.
Other Company Releases
Suburban Propane Partners LP (SPH) reported first quarter fiscal 2013 earnings per unit of $1.04, lagging the Zacks Consensus Estimate of $1.26 by 17.5%.
NGL Energy Partners (NGL) announced third quarter fiscal 2013 operating earnings of 75 cents per unit, down 7.4% from the Zacks Consensus Estimate of 81 cents.
Alon USA Energy, Inc. (ALJ) announced fourth quarter operating earnings of 58 cents per share, in line with the Zacks Consensus Estimate.
Our View
The partnership continued to reap the benefits of an acquisition-based growth strategy. Ferrellgas has already announced three acquisitions in the current fiscal year. Besides the acquisition driven growth strategy, the company is also working on its organic projects to deliver strong results.
Overland Park, Kansas-based Ferrellgas Partners LP is a leading distributor of propane and related equipment in the U.S. The partnership provides propane services to Residential, Industrial, Portable Tank Exchange, Agricultural and Wholesale customers. Ferrellgas Partners currently has a Zacks Rank #3 (Hold).
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