A month has gone by since the last earnings report for National Fuel Gas (NFG Quick QuoteNFG - Free Report) . Shares have added about 1.1% in that time frame, underperforming 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 catalysts.

National Fuel Gas Q2 Earnings Top, Sales Decline Y/Y

National Fuel Gas Company reported fiscal second-quarter 2024 adjusted operating earnings of $1.79 per share, which surpassed the Zacks Consensus Estimate of $1.41 by 26.9%. The bottom line also increased 16.2% from the year-ago quarter’s reported figure of $1.54.

GAAP earnings for the quarter were $1.80 per share, up 17.6% from the year-ago level of $1.53.

Total Revenues

NFG reported sales of $629.9 million, which missed the Zacks Consensus Estimate of $679 million by 7.2%. The top line also declined 12.2% from the prior-year recorded figure of $717.3 million.

Segmental Revenues

Utility: Revenues totaled $290.2 million, down 28.6% from $406.7 million in the year-ago quarter.

Exploration and Production and Other Revenues: Revenues totaled $264.6 million, up 8.2% from $244.5 million in the year-ago quarter.

Pipeline and Storage and Gathering: Revenues amounted to $75.1 million, implying a 13.9% increase from $65.9 million recorded in the year-ago quarter.

Highlights of the Release

Total operating expenses decreased 23.5% to $379.3 million year over year. This was primarily due to price hikes in purchased gas expenses.

Operating income increased 13.2% year over year to $250.6 million.

Interest expenses totaled $28.5 million, up 3.3% from the year-ago figure of $27.6 million.

The Exploration & Production segment produced 103 billion cubic feet (Bcf) of natural gas, up 10% from the prior-year level. This was driven by strong operational execution, particularly in the highly productive Eastern Development Area.

Financial Highlights

As of Mar 31, 2024, National Fuel Gas had cash and temporary cash investments of $50.8 million compared with $55.4 million as of Sep 30, 2023.

Net cash provided by operating activities for the first six months of fiscal 2024 totaled $586.3 million compared with $711.2 million in the year-ago period.

National Fuel Gas made capital expenditures of $481.9 million in the first six months of fiscal 2024 million compared with $496.4 million in the year-ago period.

Guidance

NFG lowered its fiscal 2024 earnings projection to the range of $4.75-$5.05 per share from the previously anticipated band of $4.90-$5.20. This decline primarily reflects the full-year impact of lower natural gas prices and price-related production curtailments at Seneca during the second quarter, partially offset by an increase in revenues in the Pipeline and Storage segment. The Zacks Consensus Estimate for the same is pegged at $4.56 per share.

The company lowered its capital expenditure guidance to $0.89-$0.98 billion from $0.89-$1 billion for fiscal 2024. It also lowered its production volume expectation to the band of 390-405 Bcf from the previously anticipated 395-410 Bcf.
 

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, National Fuel Gas has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, 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 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.