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ONE Gas (OGS) Down 5.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for ONE Gas (OGS - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ONE Gas 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 drivers.
ONE Gas Q1 Earnings Miss Estimates, Warm Weather Hurts
ONE Gas Inc. reported first-quarter 2020 earnings of $1.72 per share, lagging the Zacks Consensus Estimate of $1.78 by 3.4%.
The figure also declined 2.3% from the year-ago earnings, primarily due to warmer weather in its service territories, which in turn adversely impacted demand for natural gas.
Total Revenues
The company recorded total revenues of $528 million in the first quarter, which missed the Zacks Consensus Estimate of $632 million by 16.5%. Revenues also declined 20.1% from the year-ago level.
Quarterly Highlights
Natural gas sales volume of 72.6 billion cubic feet (Bcf) in the reported quarter was down 16% year over year, primarily due to warmer weather. Total volumes delivered at the end of the quarter were 138 Bcf, down 9% from the year ago period.
Total operating expenses in the reported quarter were marginally up 0.3% from the year-ago figure to $168.8 million.
Operating income in the reported quarter increased 4.4% year over year to $133.2 million. The improvement was attributed to residential customer growth, and new rates in Kansas and Texas. At the end of the first quarter, the company’s customer base rose 0.8% from the year-ago quarter.
The company incurred interest expenses of $15.7 million, down 0.6% from the prior-year figure.
Financial Highlights
As of Mar 31, 2020, ONE Gas had cash and cash equivalents of $11.1 million compared with $17.9 million at the end of 2019.
Long-term debt (excluding current maturities) was $1,286.1 million as of Mar 31, 2020, in line with the 2019-end figure.
The company’s cash flow from operating activities in first-quarter 2020 was $182.7 million compared with $122.9 million in the year-ago period.
Guidance
ONE Gas reiterated its 2020 guidance for net income in the range of $186-$198 million. Its earnings per share guidance are projected in the range of $3.44-$3.68. The midpoint of management’s 2020 EPS guidance is $3.56, lower than the current Zacks Consensus Estimate of $3.60 for the period.
The company expects a negative impact on earnings from lower revenues and net incremental expenses, including bad debt costs associated with the COVID-19 pandemic.
How Have Estimates Been Moving Since Then?
Estimates revision followed an upward path over the past two months.
VGM Scores
Currently, ONE Gas has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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.
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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ONE Gas (OGS) Down 5.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for ONE Gas (OGS - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ONE Gas 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 drivers.
ONE Gas Q1 Earnings Miss Estimates, Warm Weather Hurts
ONE Gas Inc. reported first-quarter 2020 earnings of $1.72 per share, lagging the Zacks Consensus Estimate of $1.78 by 3.4%.
The figure also declined 2.3% from the year-ago earnings, primarily due to warmer weather in its service territories, which in turn adversely impacted demand for natural gas.
Total Revenues
The company recorded total revenues of $528 million in the first quarter, which missed the Zacks Consensus Estimate of $632 million by 16.5%. Revenues also declined 20.1% from the year-ago level.
Quarterly Highlights
Natural gas sales volume of 72.6 billion cubic feet (Bcf) in the reported quarter was down 16% year over year, primarily due to warmer weather. Total volumes delivered at the end of the quarter were 138 Bcf, down 9% from the year ago period.
Total operating expenses in the reported quarter were marginally up 0.3% from the year-ago figure to $168.8 million.
Operating income in the reported quarter increased 4.4% year over year to $133.2 million. The improvement was attributed to residential customer growth, and new rates in Kansas and Texas. At the end of the first quarter, the company’s customer base rose 0.8% from the year-ago quarter.
The company incurred interest expenses of $15.7 million, down 0.6% from the prior-year figure.
Financial Highlights
As of Mar 31, 2020, ONE Gas had cash and cash equivalents of $11.1 million compared with $17.9 million at the end of 2019.
Long-term debt (excluding current maturities) was $1,286.1 million as of Mar 31, 2020, in line with the 2019-end figure.
The company’s cash flow from operating activities in first-quarter 2020 was $182.7 million compared with $122.9 million in the year-ago period.
Guidance
ONE Gas reiterated its 2020 guidance for net income in the range of $186-$198 million. Its earnings per share guidance are projected in the range of $3.44-$3.68. The midpoint of management’s 2020 EPS guidance is $3.56, lower than the current Zacks Consensus Estimate of $3.60 for the period.
The company expects a negative impact on earnings from lower revenues and net incremental expenses, including bad debt costs associated with the COVID-19 pandemic.
How Have Estimates Been Moving Since Then?
Estimates revision followed an upward path over the past two months.
VGM Scores
Currently, ONE Gas has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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.
Outlook
ONE Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.