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National Fuel Gas (NFG) Up 4.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for National Fuel Gas (NFG - Free Report) . Shares have added about 4.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is National Fuel 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.

National Fuel Gas Q1 Earnings Beat on Higher Production

National Fuel Gas Company reported fiscal first-quarter 2024 adjusted operating earnings of $1.46 per share, which surpassed the Zacks Consensus Estimate of $1.32 by 10.6%. However, the bottom line declined 20.65% from the year-ago figure of $1.84.

GAAP earnings in the quarter were $1.44 per share, down 21.7% from the year-ago level of $1.84.

Total Revenues

Revenues of $525.4 million lagged the Zacks Consensus Estimate of $654 million by 19.6%.

The top line decreased 20.3% from the prior-year quarter figure of $659 million. The year-over-year fall was primarily due to lower realized natural gas prices.

Segmental Revenues

Utility: Revenues in the first quarter of fiscal 2024 totaled $201.9 million, down 35.2% from $312 million in the year-ago quarter.

Pipeline and Storage and Gathering: Revenues amounted to $69.4 million, reflecting a 1.2% decrease from $70.3 million in the year-ago quarter.

Exploration and Production and Other Revenues: Revenues in the first quarter of fiscal 2024 totaled $254 million, down 8.3% from $276.9 million in the year-ago quarter.

Highlights of the Release

Total operating expenses decreased 21.3% to $318.3 million year over year.

Operating income was down 18.6% year over year to $207.1 million.

Interest expenses totaled $34.7 million, up 3.8% from the year-ago quarter levels of $33.4 million.

The Exploration & Production segment produced 101 billion cubic feet (Bcf) of natural gas, an increase of 11% from the prior-year quarter, driven by strong operational execution in its Eastern Development Area.

Financial Highlights

As of Dec 31, 2023, National Fuel Gas had cash and temporary cash investments of $41.7 million compared with $55.4 million as of Sep 30, 2023.

Net cash provided by operating activities for the fiscal first quarter of 2024 was $270.9 million compared with $327.4 million from the year ago quarter.

National Fuel Gas invested $246.9 million in the first quarter of fiscal 2024 compared with $233.5 million in the first quarter of fiscal 2023.


NFG lowered its fiscal 2024 earnings guidance to the range of $4.90-$5.20 per share from the prior range of $5.40-$5.90 per share. The decline in guidance primarily reflects the impact of lower natural gas price expectations, partially offset by the improved outlook for both production and lease operating and transportation expenses in the Exploration and Production segment.  The Zacks Consensus Estimate is pegged at $5.05 per share, higher than $4.74, the midpoint of the guided range.

The company increased its capital expenditure guidance to the range of $885-$1000 million from $865-$975 million for fiscal 2024. It expects production volume in the band of 395-410 Bcf for the same year.


How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, National Fuel Gas has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 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.


Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, National Fuel Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

National Fuel Gas belongs to the Zacks Utility - Gas Distribution industry. Another stock from the same industry, Atmos Energy (ATO - Free Report) , has gained 2.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

Atmos reported revenues of $1.16 billion in the last reported quarter, representing a year-over-year change of -21.9%. EPS of $2.08 for the same period compares with $1.91 a year ago.

Atmos is expected to post earnings of $2.66 per share for the current quarter, representing a year-over-year change of +7.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Atmos. Also, the stock has a VGM Score of D.

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