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Atmos (ATO) Down 0.9% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Atmos Energy (ATO - Free Report) . Shares have lost about 0.9% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Atmos 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.

Atmos Energy Q3 Earnings and Revenues Top Estimates

Atmos Energy posted third-quarter fiscal 2022 earnings per share (EPS) of 92 cents, which surpassed the Zacks Consensus Estimate of 86 cents by 7%. The bottom line improved by 17.9% from the year-ago earnings of 78 cents per share.

Revenues

Total revenues of $816.4 million surpassed the Zacks Consensus Estimate of $758 million by 7.7%. The top line increased 34.8% from the year-ago reported figure of $605.6 million.

Segment Revenues

Distribution: Revenues from the segment increased 38.4% to $773.3 million from $558.8 million in the prior-year quarter.

Pipeline and Storage: Revenues from the segment increased 12.5% to $183.4 million from $163 million in the year-ago quarter.

Highlights of the Release

The purchased gas cost for the quarter was $249.2 million, up 186.8% from the year-ago period. Operation and maintenance expenses for the quarter were $182.3 million, down 1.2% from the year-ago period.

The operating income for the second quarter was up 15.9% year over year to $154.6 million.

Atmos Energy incurred interest expenses of $26.2 million, up 24.8% from the year-ago period.

As of Jun 30, 2022, ATO had cash and cash equivalents of $328.1 million. Net cash flow provided (used in) by operating activities in the first nine months of 2022 was $929.3 million compared with ($1,158.5) million in the year-ago period.

As of Jun 30, 2022, Atmos Energy’s available liquidity was $3.5 billion.

Atmos Energy invested $1,726 million in the nine months ended Jun 30 to strengthen operations. Nearly 87% of capital spending was associated with system safety and increased reliability of services.

Guidance

Atmos Energy reiterated its fiscal 2022 earnings guidance in the range of $5.50-$5.60 per share. The Zacks Consensus Estimate for fiscal 2022 earnings of $5.54 per share is lower than $5.55, the midpoint of the guided range. ATO reiterated its capital expenditure expectation in the range of $2.4-$2.5 billion for fiscal 2022.

How Have Estimates Been Moving Since Then?

Estimates revision followed an upward path over the past two months.

VGM Scores

Currently, Atmos has a nice Growth Score of B, though it is lagging a lot on the Momentum Score 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.

Outlook

Atmos has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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