A month has gone by since the last earnings report for Ferrellgas Partners, L.P. . Shares have lost about 5.2% 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 catalysts.
Ferrellgas Partners Q2 Earnings and Revenues Miss
Ferrellgas Partners LP reported second-quarter fiscal 2017 adjusted earnings of $0.39 per unit, lagging the Zacks Consensus Estimate of $0.68 by 42.6%. Further, quarterly earnings were lower than the year-ago earnings of $0.58 by 32.8%.
The bottom line deteriorated primarily due to weak contributions from its midstream crude oil logistics segment.
Total Revenue
In the reported quarter, Ferrellgas Partners’ total revenue came in at $579.2 million, missing the Zacks Consensus Estimate of $592 million by 2.2%.
Even on a year-over-year basis, the partnership’s top-line declined 10.8% primarily owing to weak Midstream operations, and its Other segment which plunged 46.4% year over year.
Highlights of the Release
Operating expenses in the reported quarter were $112.5 million, down 3.3% from the prior-year level.
General and administrative expenses for the quarter under review decreased 5.8% to $11.5 million from $12.1 million in the prior-year period.
Weather in the reported quarter was 14% warmer than normal, however due to the efforts of Ferrellgas Partners’ new management to increase market share, gallons sold during the quarter improved nearly 7% year over year.
Operating income in the reported quarter was $75.2 million, down 19.8% year over year. Despite a higher sales volume, margins in the reported quarter were lower due to customer mix and location.
Interest expenses increased to $36.8 million in the quarter from $34.7 million a year ago, reflecting increased borrowings to fund acquisitions.
Financial Position
Ferrellgas Partners’ cash and cash equivalents were $14.7 million as of Jan 31, 2017, compared with $4.9 million as of Jul 31, 2016.
Long-term debt was $1,966.9 million as of Jan 31, 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 a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 27.1% due to these changes.
VGM Scores
At this time, Ferrellgas' stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.
Image: Bigstock
Ferrellgas (FGP) Down 5.2% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ferrellgas Partners, L.P. . Shares have lost about 5.2% 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 catalysts.
Ferrellgas Partners Q2 Earnings and Revenues Miss
Ferrellgas Partners LP reported second-quarter fiscal 2017 adjusted earnings of $0.39 per unit, lagging the Zacks Consensus Estimate of $0.68 by 42.6%. Further, quarterly earnings were lower than the year-ago earnings of $0.58 by 32.8%.
The bottom line deteriorated primarily due to weak contributions from its midstream crude oil logistics segment.
Total Revenue
In the reported quarter, Ferrellgas Partners’ total revenue came in at $579.2 million, missing the Zacks Consensus Estimate of $592 million by 2.2%.
Even on a year-over-year basis, the partnership’s top-line declined 10.8% primarily owing to weak Midstream operations, and its Other segment which plunged 46.4% year over year.
Highlights of the Release
Operating expenses in the reported quarter were $112.5 million, down 3.3% from the prior-year level.
General and administrative expenses for the quarter under review decreased 5.8% to $11.5 million from $12.1 million in the prior-year period.
Weather in the reported quarter was 14% warmer than normal, however due to the efforts of Ferrellgas Partners’ new management to increase market share, gallons sold during the quarter improved nearly 7% year over year.
Operating income in the reported quarter was $75.2 million, down 19.8% year over year. Despite a higher sales volume, margins in the reported quarter were lower due to customer mix and location.
Interest expenses increased to $36.8 million in the quarter from $34.7 million a year ago, reflecting increased borrowings to fund acquisitions.
Financial Position
Ferrellgas Partners’ cash and cash equivalents were $14.7 million as of Jan 31, 2017, compared with $4.9 million as of Jul 31, 2016.
Long-term debt was $1,966.9 million as of Jan 31, 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 a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 27.1% 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, Ferrellgas' stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.