Why Is Ferrellgas (FGP) Down 17.8% Since the Last Earnings Report?
A month has gone by since the last earnings report for Ferrellgas Partners, L.P. FGP. Shares have lost about 17.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 drivers.
Ferrellgas Q3 Earnings & Revenues Lag Estimates
Ferrellgas Partners reported third-quarter fiscal 2017 adjusted earnings of $0.07 per unit, lagging the Zacks Consensus Estimate of $0.10 by 30.0%. Further, quarterly earnings were 63.1% lower than the year-ago earnings of $0.19.
Total Revenue
In the reported quarter, Ferrellgas Partners’ total revenue came in at $538.1 million, missing the Zacks Consensus Estimate of $573 million by 6.1%.
However on a year-over-year basis, the partnership’s top line improved 5.6% primarily owing to better contribution from Propane and other gas liquids sales, as well as Midstream operations. Meanwhile the Other segment plunged 46.4% year over year.
Highlights of the Release
In the reported quarter, 212.2 million gallons of Propane were sold compared with 223.4 million gallons in the prior-year quarter.
Operating expenses in the reported quarter were $104.7 million, down 9.1% from the prior-year level.
General and administrative expenses for the quarter decreased 20.2% to $9.9 million from $12.4 million in the prior-year period.
Operating income in the reported quarter was $46.2 million, down 14.8% year over year. Despite a higher sales volume, margins in the reported quarter were lower due to customer mix.
Interest expenses increased to $39.9 million in the quarter from $34.7 million a year ago, reflecting an increase of 16.3%.
Financial Position
Ferrellgas Partners’ cash and cash equivalents were $9.5 million as of Apr 30, 2017, compared with $4.9 million as of Jul 31, 2016.
Long-term debt was $1,984.2 million as of Apr 30, 2017, up from $1,941.3 million as of Jul 31, 2016.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. In the past month, the consensus estimate has moved 8.2% up due to these changes.
Ferrellgas Partners, L.P. Price and Consensus
Ferrellgas Partners, L.P. Price and Consensus | Ferrellgas Partners, L.P. Quote
VGM Scores
At this time, the stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is equally suitable for value and growth investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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