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Why Is UGI (UGI) Up 4.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for UGI (UGI - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.

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

UGI Corp's Earnings Miss Estimates in Fiscal 2019

UGI Corporation delivered fiscal 2019 adjusted earnings $2.28 per share, which missed the Zacks Consensus Estimate of $2.35 by 3%. The bottom line also declined 16.8% from the prior-year’s figure of $2.74.

The company reported GAAP earnings of $1.41 in fiscal 2019 compared with $4.06 in fiscal 2018.

Revenues

Revenues of $1,150.4 million missed the Zacks Consensus Estimate of $1,204 million by 4.5%. The top line declined 9.6% from the year-ago quarter’s figure of $1,273.1 million.

In fiscal 2019, total revenues amounted to $7,320.4 million down, 4.3% from $7,651.2 million in fiscal 2018.

Segment Revenues

AmeriGas Propane: The segment generated revenues of $411.5 million in the quarter under review, down 11.8% from year-ago quarter’s tally.

UGI International: This segment generated revenues of $391.7 million, down 14.2% from year-ago quarter’s figure.

Midstream & Marketing: Revenues in the segment totaled $246.6 million, down from $264.7 million in the prior-year quarter.

UGI Utilities: This segment generated revenues of $132.4 million in the quarter under review, up 5% from year-ago quarter’s reported figure.

Corporate & Other: This segment incurred a loss of $31.8 million compared with a loss of $41.1 million in the prior-year quarter.

Operational Highlights

Total interest expenses amounted to $76.1 million, up 32.8% from the prior-year quarter’s tally.

The company completed the acquisition of Columbia Midstream Group and the AmeriGas Merger transaction in the quarter under review.

Midstream & Marketing segment completed its fourth expansion of the Auburn system in November 2019, expanded the Texas Creek gathering system in northern Pennsylvania, began construction of the Bethlehem LNG storage and vaporization facility as well as acquired South Jersey Energy Company's natural gas marketing business.

Guidance

The company expects fiscal 2020 adjusted earnings per share in the range of $2.60-$2.90, whose midpoint of $2.75 is lower than the Zacks Consensus Estimate of $3.04.

 

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, UGI has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, UGI has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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