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ONE Gas (OGS) Down 2.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for ONE Gas (OGS - Free Report) . Shares have lost about 2.3% 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 Q3 Earnings Beat Estimates, Revenues Fall Y/Y
ONE Gas, Inc. reported third-quarter 2023 operating earnings per share (EPS) of 45 cents, which surpassed the Zacks Consensus Estimate of 42 cents by 7.1%. The bottom line increased 2.3% from the year-ago quarter’s figure of 44 cents.
Total Revenues
ONE Gas recorded revenues of $335.8 million, which missed the Zacks Consensus Estimate of $393 million by 14.6%. The top line also decreased 6.6% from $359.4 million in the prior-year period.
Highlights of the Release
Total natural gas volumes delivered in the reported quarter were 64.2 billion cubic feet (bcf), down 2.6% from the year-ago quarter’s level. ONE Gas served 2,251,000 customers during the reported quarter, up 0.3% year over year. Actual performance was almost on par with our model prediction. Our model predicted 64.1 bcf total natural gas volumes delivered and 2,264,000 total customers served.
Total operating expenses were $207.7 million, up 11.6% from that recorded in the comparable period of 2022. This increase was due to a rise in Operations and maintenance (O&M) and depreciation and amortization expenses.
Operating income increased 21.6% year over year to $57.2 million.
ONE Gas incurred net interest expenses of $28 million, up 43% from the year-ago quarter’s level.
Financial Highlights
As of Sep 30, 2023, OGS had cash and cash equivalents of $9.2 million compared with $9.7 million as of Dec 31, 2022.
Long-term debt (excluding current maturities) was $1,862.6 million as of Sep 30, 2023, compared with $2,661.7 million as of Dec 31, 2022.
In the first nine months of 2023, cash provided by operating activities was $842.5 million compared with $1,555.8 million in the year-ago period.
2023 Guidance
ONE Gas has narrowed its net income guidance in the range of $227-$236 million. The company’s EPS has been revised to $4.06-$4.22 from $4.02-$4.26 projected earlier. The Zacks Consensus Estimate for earnings is pegged at $4.12 per share, a tad lower than the mid-point of the company’s guided range.
OGS continues to expect capital expenditures, including asset removal costs, of approximately $725 million in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, ONE Gas has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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 2.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for ONE Gas (OGS - Free Report) . Shares have lost about 2.3% 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 Q3 Earnings Beat Estimates, Revenues Fall Y/Y
ONE Gas, Inc. reported third-quarter 2023 operating earnings per share (EPS) of 45 cents, which surpassed the Zacks Consensus Estimate of 42 cents by 7.1%. The bottom line increased 2.3% from the year-ago quarter’s figure of 44 cents.
Total Revenues
ONE Gas recorded revenues of $335.8 million, which missed the Zacks Consensus Estimate of $393 million by 14.6%. The top line also decreased 6.6% from $359.4 million in the prior-year period.
Highlights of the Release
Total natural gas volumes delivered in the reported quarter were 64.2 billion cubic feet (bcf), down 2.6% from the year-ago quarter’s level. ONE Gas served 2,251,000 customers during the reported quarter, up 0.3% year over year. Actual performance was almost on par with our model prediction. Our model predicted 64.1 bcf total natural gas volumes delivered and 2,264,000 total customers served.
Total operating expenses were $207.7 million, up 11.6% from that recorded in the comparable period of 2022. This increase was due to a rise in Operations and maintenance (O&M) and depreciation and amortization expenses.
Operating income increased 21.6% year over year to $57.2 million.
ONE Gas incurred net interest expenses of $28 million, up 43% from the year-ago quarter’s level.
Financial Highlights
As of Sep 30, 2023, OGS had cash and cash equivalents of $9.2 million compared with $9.7 million as of Dec 31, 2022.
Long-term debt (excluding current maturities) was $1,862.6 million as of Sep 30, 2023, compared with $2,661.7 million as of Dec 31, 2022.
In the first nine months of 2023, cash provided by operating activities was $842.5 million compared with $1,555.8 million in the year-ago period.
2023 Guidance
ONE Gas has narrowed its net income guidance in the range of $227-$236 million. The company’s EPS has been revised to $4.06-$4.22 from $4.02-$4.26 projected earlier. The Zacks Consensus Estimate for earnings is pegged at $4.12 per share, a tad lower than the mid-point of the company’s guided range.
OGS continues to expect capital expenditures, including asset removal costs, of approximately $725 million in 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, ONE Gas has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, ONE Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.