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Why Is ONE Gas (OGS) Up 5.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for ONE Gas (OGS - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ONE Gas due for a pullback? 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.
ONE Gas Q4 Earnings Miss Estimates, Revenues Beat
ONE Gas, Inc. recorded fourth-quarter 2018 operating earnings of 84 cents per share, lagging the Zacks Consensus Estimate of 85 cents by 1.2%.
The bottom line was also lower than the year-ago level by 5.6%. This was primarily due to higher operating expenses recorded during the quarter.
Total Revenues
The company reported total revenues of $464.5 million in the fourth quarter, beating the Zacks Consensus Estimate of $451 million by nearly 3%. Also, the figure was ahead of the prior-year revenues of $462.4 million by 0.5%.
Quarterly Highlights
Total operating expenses in the reported quarter increased 3.9% from the year-ago quarter to $164.9 million, owing to increase in operating and maintenance expenses, as well as general taxes.
Operating income in the reported quarter was down 13.8% year over year to $80.8 million.
The company incurred interest expenses of $14.6 million, up 23.8% from the year-ago period.
At the end of 2018, the company served 13,000 more customers than the last year, primarily due to growth in residential customer base, accompanied with an increase in gas volume delivered to customers. At the end of 2018, it delivered 392.5 billion cubic feet of natural gas, up 14.2% year over year.
Financial Highlights
On Dec 31, 2018, ONE Gas had cash and cash equivalents of $21.32 million compared with $14.4 million in the corresponding period of 2017.
Long-term debt (excluding current maturities) was $1,285.5 million as of Dec 31, 2018, down from the Dec 31, 2017 level of $1,193.3 million.
The company’s cash flow from operating activities in 2018 was $467.7 million, up from $253.8 million recorded in 2017.
Guidance
ONE Gas reiterated its guidance for 2019 net income in the range of $174-$190 million and earnings per share within $3.27-$3.57. The midpoint of management’s 2019 EPS guidance is $3.42, which is in line with the current Zacks Consensus Estimate for the period.
The company now expects 2019 capital expenditure to be $450 million, with 70% of it directed toward system integrity and replacement projects.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
Currently, ONE Gas has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
ONE Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is ONE Gas (OGS) Up 5.7% Since Last Earnings Report?
It has been about a month since the last earnings report for ONE Gas (OGS - Free Report) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ONE Gas due for a pullback? 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.
ONE Gas Q4 Earnings Miss Estimates, Revenues Beat
ONE Gas, Inc. recorded fourth-quarter 2018 operating earnings of 84 cents per share, lagging the Zacks Consensus Estimate of 85 cents by 1.2%.
The bottom line was also lower than the year-ago level by 5.6%. This was primarily due to higher operating expenses recorded during the quarter.
Total Revenues
The company reported total revenues of $464.5 million in the fourth quarter, beating the Zacks Consensus Estimate of $451 million by nearly 3%. Also, the figure was ahead of the prior-year revenues of $462.4 million by 0.5%.
Quarterly Highlights
Total operating expenses in the reported quarter increased 3.9% from the year-ago quarter to $164.9 million, owing to increase in operating and maintenance expenses, as well as general taxes.
Operating income in the reported quarter was down 13.8% year over year to $80.8 million.
The company incurred interest expenses of $14.6 million, up 23.8% from the year-ago period.
At the end of 2018, the company served 13,000 more customers than the last year, primarily due to growth in residential customer base, accompanied with an increase in gas volume delivered to customers. At the end of 2018, it delivered 392.5 billion cubic feet of natural gas, up 14.2% year over year.
Financial Highlights
On Dec 31, 2018, ONE Gas had cash and cash equivalents of $21.32 million compared with $14.4 million in the corresponding period of 2017.
Long-term debt (excluding current maturities) was $1,285.5 million as of Dec 31, 2018, down from the Dec 31, 2017 level of $1,193.3 million.
The company’s cash flow from operating activities in 2018 was $467.7 million, up from $253.8 million recorded in 2017.
Guidance
ONE Gas reiterated its guidance for 2019 net income in the range of $174-$190 million and earnings per share within $3.27-$3.57. The midpoint of management’s 2019 EPS guidance is $3.42, which is in line with the current Zacks Consensus Estimate for the period.
The company now expects 2019 capital expenditure to be $450 million, with 70% of it directed toward system integrity and replacement projects.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
Currently, ONE Gas has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
ONE Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.