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National Fuel Gas (NFG) Up 3.3% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for National Fuel Gas (NFG). Shares have added about 3.3% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is National Fuel Gas due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

National Fuel Gas Beats on Q4 Earnings, Ups 2021 View

National Fuel Gas Company posted fourth-quarter fiscal 2020 operating earnings of 40 cents per share, which beat the Zacks Consensus Estimate of 34 cents by 17.7%. However, earnings declined 25.9% from the year-ago figure of 54 cents per share.

Total Revenues

Total revenues of $288 million missed the Zacks Consensus Estimate of $337 million by 14.5%. The top line also dropped 1.7% from the prior-year figure of $293 million.

Highlights of the Release

Total operating costs for the reported quarter (excluding the impairment expenses) decreased 0.4% from the year-ago level to $208.5 million.

Exploration and Production segment’s net production of 67.3 billions of cubic feet equivalent (Bcfe) reflected an increase of 8.2 Bcfe or 14% from the prior year, primarily due to the acquisition of Appalachian assets.

It incurred interest expenses of $32.1 million, up 25.4% from the year-ago figure.

Total natural gas and crude oil reserves as of Sep 30, 2020 were 3,458 Bcfe, reflecting an increase of 359 Bcfe or 12% from Sep 30, 2019.

Financial Highlights

As of Sep 30, 2020, National Fuel Gas had cash and cash equivalents were $20.5 million compared with $20.4 million on Sep 30, 2019.

Long-term debt (excluding current maturities) was $2,629.6 million as of Sep 30, 2020 compared with the Sep 30, 2019 level of $2,133.7 million.

The company’s cash flow from operating activities for fiscal 2020 was $740.8 million, up from $694.5 million recorded in the comparable year-ago period.

Total capital expenditure for fiscal 2020 was $716.1 million, down from $788.9 million in the comparable year-ago period.


National Fuel Gas revised its fiscal 2021 earnings guidance to the range of $3.55-$3.85 from the prior expectation of $3.40-$3.70. The mid-point of the new guidance is $3.70, which is higher than the Zacks Consensus Estimate of $3.67.

National Fuel Gas increased its fiscal 2021 capital expenditure guidance to the range of $720-$830 million from the earlier expectation of $660-$770 million.

Fiscal 2021 production is expected in the range of 305-335 Bcfe.


How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 6.79% due to these changes.

VGM Scores

Currently, National Fuel Gas has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.


National Fuel Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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