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Ferrellgas Partners (FGP) Q2 Earnings: What's in the Cards?

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Ferrellgas Partners, LP will release fiscal second-quarter 2017 financial results, before the market opens on Mar 9.

Last quarter, the partnership posted a positive earnings surprise of 13.73%. However, in the trailing four quarters, the partnership has recorded average negative surprise of 134.05%. Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Ferrellgas Partners’ midstream business is expected to face challenging conditions going ahead due to the loss of its largest customer.

The partnership had missed the Zacks Consensus Estimate in the last three out of four quarters owing to a persistently tough market scenario. Going ahead, the scenario is projected to continue, thereby having an adverse impact on the partnership’s performance.

In addition, above-average temperatures in the U.S. are expected to hurt the demand for propane. A report from U.S. Energy Information Administration (EIA) indicates that the U.S. households are likely to spend less on heating this winter compared with eight out of the past ten winters. Consequently, this will hurt Ferrellgas Partners’ performance in the fiscal second quarter.

However, the new management could steer the partnership from rough waters toward profitability once again.

Earnings Whispers

Our proven model does not conclusively show that Ferrellgas Partners is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.

Zacks ESP: Ferrellgas Partners has an Earnings ESP of +2.94%. This is because the Most Accurate estimate stands at 70 cents, while the Zacks Consensus Estimate is pegged lower at 68 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ferrellgas Partners carries a Zacks Rank #4 (Sell). Ferrellgas Partners’ Zacks Rank #4, when combined with a positive ESP, makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement.

Price Movement

In the last one year, Ferrellgas Partners has underperformed the Zacks categorized Oil Refining and Marketing MLP industry. During this period, the partnership’s units lost 64.4%, compared with the industry’s gain of 30.1%.



Moreover, the warmer-than-expected temperature is expected to hurt demand for propane in second-quarter fiscal 2017.

Upcoming Release

A stock in the same space which has the right combination of elements to report an earnings surprise is:

Global Partners LP (GLP - Free Report) is expected to report fourth-quarter 2016 earnings on Mar 9. The partnership carries a Zacks Rank #3 and has an Earnings ESP of +10.92%.

Peer Releases

Calumet Specialty Products Partners, L.P. (CLMT - Free Report) reported a loss of 98 cents in fourth-quarter 2016, wider than the Zacks Consensus Estimate of a loss of 73 cents. The partnership carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here

AmeriGas Partners’ fourth-quarter 2016 earnings of 95 cents missed the Zacks Consensus Estimate by 7.77%. The partnership carries a Zacks Rank #3.

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