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Wunderlich Securities Believes Seasonal Loss Is Deeper Than Projected For Gas Natural

Dwight Einhorn

In a report published Friday, Wunderlich Securities analyst Mike Bates reiterated a Buy rating and $13.50 price target on Gas Natural (NYSE: EGAS).

In the report, Wunderlich Securities noted, “Gas Natural (EGAS) reported a 2Q14 non-GAAP loss of $0.07, down from -$0.04 a year ago. Results benefited from strong customer growth and delivered volumes, but were below our estimate of -$0.04 and the -$0.01 consensus (two analysts) due primarily to increased expenses for professional services. GAAP EPS of -$0.14 include a $0.07 non-recurring loss associated with a bad debt write-off.

"Natural Gas Operations reported a seasonal loss of $0.04, down from -$0.03 a year ago and below our forecast of -$0.02. Gross margin of $9.1 million increased 18% and was 4% higher than we had projected. The improvement was driven by an 11% increase in throughput for full-service customers, partially due to favorable spring weather. These benefits were more than offset by higher operating expenses, including professional services related to regulatory proceedings.”

Gas Natural closed on Thursday at $12.02.

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