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Ferrellgas Partners LP (FGP - Analyst Report) reported second quarter fiscal 2014 adjusted earnings per unit of 87 cents, missing the Zacks Consensus Estimate of 89 cents by 2.2%. Adjusted earnings exclude the effect of non-recurring expenses.

Quarterly earnings per unit increased 24.3% from 70 cents in the year-ago period, primarily due to a favorable top line and operational efficiencies.

Total Revenue

Ferrellgas Partners reported second quarter fiscal 2014 total revenue of $869.7 million, beating the Zacks Consensus Estimate by 20.3%. On a year-over-year basis, the partnership’s sales increased nearly 32.0%.

The improvement in revenues was primarily due to a 35.4% year-over-year rise in sales at the Propane and other gas liquids sales segment on the back of higher propane gallon sales and strong contribution from the Other segment.

Operating Highlights

In the quarter under review, Ferrellgas Partners’ propane sales volume increased 14.8% year over year to 342.9 million gallons. The upswing came primarily from colder-than-normal weather.

The partnership’s gross profit rose 14.6% to $269.5 million from $235.2 million in the year-ago quarter, primarily due to higher sales volumes.

Operating expenses increased 10.6% year over year to $116.7 million due to cost related to higher volumes sold in the quarter.

The partnership generated an operating income of $104.8 million compared with $82.1 million in the year-ago quarter.

Interest expenses in the second quarter dropped 2.3% year over year to $22.1 million.

Quarterly adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) were $136.4 million, up 17.4% from the year-ago figure.

Financial Highlights

Cash and cash equivalents as of Jan 31, 2014 were $18.3 million versus $6.5 million as of Jul 31, 2013.

The partnership's long-term debt as of Jan 31, 2014 was $1.2 billion, up from $1.1 billion as of Jul 31, 2013.


The partnership raised its fiscal 2014 EBITDA guidance to the range of $275–$285 million from an earlier guidance of $265–$275 million. Management is positive about the forthcoming quarters considering its growth and acquisition opportunities.

Other Company Releases

Marathon Petroleum Corporation (MPC - Analyst Report) reported earnings per share (adjusted for special items) of $2.10 in the fourth quarter of 2013, ahead of the Zacks Consensus Estimate of $1.16.

Phillips 66 (PSX - Analyst Report) posted adjusted fourth-quarter 2013 earnings of $1.34 per share, beating the Zacks Consensus Estimate of $1.05 by 27.6%.

Valero Energy Corporation (VLO - Analyst Report) announced adjusted fourth-quarter 2013 income of $1.78 per share, surpassing the Zacks Consensus Estimate of $1.69 by 5.3%.

Ferrellgas Partners currently carries a Zacks Rank #3 (Hold).

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