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Why Is Ferrellgas Partners, L.P. (FGP) Down 21.4% Since Last Earnings Report?

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A month has gone by since the last earnings report for Ferrellgas Partners, L.P. (FGP - Free Report) . Shares have lost about 21.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ferrellgas Partners, L.P. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Ferrellgas Partners Misses on Earnings & Revenues in Q2

Ferrellgas delivered second-quarter fiscal 2019 adjusted earnings of 44 cents per unit, which missed the Zacks Consensus Estimate of 57 cents by 22.8%. The partnership incurred a loss of 2 cents in the prior-year quarter.

Total Revenues

In the quarter under review, Ferrellgas Partners’ total revenues amounted to $573.4 million, which lagged the Zacks Consensus Estimate of $605 million by 5.2%. Also, the top line declined 24% from $755.2 million in the prior-year quarter.

Revenues fell 7% year over year in the Propane and other gas liquids sales segments and plunged 49% in the Other segment.

Highlights of the Release

In the reported quarter, nearly 309.7 million gallons of propane were sold, down from 310 million gallons in the prior-year quarter. Customer base increased 4% year over year. The partnership’s current Blue Rhino tank exchange sales locations totalled in excess of 53,700, up more than 10% from levels in the beginning of fiscal 2018.

Total Retail propane sales volume increased approximately 2% in the quarter under review.

Operating expenses amounted to $121.2 million, down from $123.7 million in the prior-year quarter.

General and administrative expenses amounted to $16.3 million, up from $14.8 million in the prior-year quarter.

Interest expenses were $44.8 million, up from $42.7 million in the prior-year quarter.

The partnership continues to expand operations through acquisitions. It completed five accretive acquisitions of Blue Rhino independent distributors on a year-to-date basis.

Financial Position

Ferrellgas Partners’ cash and cash equivalents were $40.6 million as of Jan 31, 2019 compared with $119.3 million as of Jul 31, 2018.

Long-term debt was $2,081 million as of Dec 31, 2019 compared with $2,078.6 million as of Jul 31, 2018.
 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Ferrellgas Partners, L.P. has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ferrellgas Partners, L.P. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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