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Atmos Energy (ATO) Q4 Earnings Beat Estimates by a Penny

Zacks Equity Research

Atmos Energy Corporation ATO posted fourth-quarter fiscal 2019 earnings of 49 cents per share, which surpassed the Zacks Consensus Estimate of 48 cents by 2.1%.

The reported earnings also improved 19.5% from the prior-year figure. The year-over-year improvement in earnings was due to positive rate outcomes, and higher margins in its pipeline and storage segment.

Total Revenues

Total revenues of $443.7 million lagged the Zacks Consensus Estimate of $578 million by 23.2%. Moreover, the figure was marginally lower than the year-ago total revenues of $444.7 million by 0.2%. The year-over-year decline in revenues was due to lower contribution from the distribution segment.

Atmos Energy Corporation Price, Consensus and EPS Surprise

Atmos Energy Corporation Price, Consensus and EPS Surprise

Atmos Energy Corporation price-consensus-eps-surprise-chart | Atmos Energy Corporation Quote

Segment Revenues

Distribution: Revenues from the segment decreased 0.9% to $403.8 million from $407.5 million in the prior-year quarter.

Pipeline and Storage: Revenues from the segment increased 11.3% to $147.7 million from $132.7 million in the year-ago quarter. The improvement was driven by increase in rates, wider spreads, and positive supply and demand dynamics in the Permian Basin.

Quarterly Highlights

Total operating expenses in the reported quarter increased 9.5% from the year-ago level to $340.3 million due to higher operation and maintenance expenses, as well as depreciation and amortization costs.

Operating income in the reported quarter was down 1.1% year over year to $89.7 million due to higher operating expenses. Higher contribution from distribution and pipeline, and storage segments was more than offset by increased operation and maintenance, and depreciation expenses in the quarter.

The company incurred interest expenses of $28.8 million, up 17.6% from the year-ago period.

Financial Highlights

As of Sep 30, 2019, Atmos Energy had cash and cash equivalents of $24.5 million compared with $13.8 million in the corresponding period of 2018.

Long-term debt was $3.53 billion as of Sep 30, 2019, up from $2.49 billion in the comparable year-ago period.

The company’s cash flow from operating activities in fiscal 2019 was $968.8 million, down from $1,124.6 million recorded a year ago.

It invested $1.69 billion in fiscal 2019 compared with $15 billion in fiscal 2018. The increase in capital spending was due to continued spending for infrastructure replacements and enhancements.

Guidance

Atmos Energy expects fiscal 2020 earnings in the range of $4.58-$4.73 per share. The Zacks Consensus Estimate for fiscal 2020 is $4.63 per share. Capital expenditure is expected in the range of $1.85-$1.95 billion for fiscal 2020.

Zacks Rank

Atmos Energy currently has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

National Fuel Gas Company NFG posted fourth-quarter fiscal 2019 operating earnings of 54 cents per share, beating the Zacks Consensus Estimate of 53 cents by 1.9%.

ONEOK Inc. OKE reported third-quarter 2019 operating earnings of 74 cents per share, in line with the Zacks Consensus Estimate.

ONE Gas OGS reported third-quarter 2019 earnings of 33 cents per share, which lagged the Zacks Consensus Estimate of 34 cents by 2.9%.

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