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Atmos Energy (ATO) Q2 Earnings Beat Estimates, Revenues Miss

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Atmos Energy Corporation (ATO - Free Report) posted second-quarter fiscal 2020 earnings of $1.95 per share, which surpassed the Zacks Consensus Estimate by a penny.

The reported earnings also improved 7.1% from the prior-year figure. The year-over-year improvement in earnings was due to positive rate outcomes and customer growth in the distribution segment.

Total Revenues

Total revenues of $978 million missed the Zacks Consensus Estimate of $1,127 million by 13.2% and decreased 10.6% from the year-ago figure of $1,094.7 million.

Atmos Energy Corporation Price, Consensus and EPS Surprise

Atmos Energy Corporation Price, Consensus and EPS Surprise

Atmos Energy Corporation price-consensus-eps-surprise-chart | Atmos Energy Corporation Quote

Segment Revenues

Distribution: Revenues from the segment decreased 11.8% to $933 million from $1,057.9 million in the prior-year quarter.

Pipeline and Storage: Revenues from the segment increased 7.8% to $146.2 million from $135.7 million in the year-ago quarter. The improvement was driven by an increase in rates, marginally offset by a rise in depreciation expenses.

Quarterly Highlights

Purchased gas cost in the quarter was $317.9 million, down 32.6% from the year-ago period. Operation and maintenance expense in the quarter was $147.8 million, down 1.1% from the year-ago period.

Operating income in the reported quarter was up 11.3% year over year to $331.5 million.

The company incurred interest expenses of $22.2 million, down 17.5% from the year-ago period.

Financial Highlights

As of Mar 31, 2020, Atmos Energy had cash and cash equivalents of $320.1 million compared with $24.6 million on Sep 30, 2019.

Long-term debt was $4.3 billion as of Mar 31, 2020, up from $3.53 billion on Sep 30, 2019.

The company’s cash flow from operating activities in the first six months of fiscal 2020 was $633.8 million, up from $520.8 million recorded in the year-ago period.

It invested $994.7 million in the first six months of fiscal 2020 compared with $777.6 million in the comparable year-ago period. The increase in capital spending was due to continued spending for infrastructure replacements and enhancements.

Guidance

Since the impact of the novel coronavirus remains uncertain, Atmos Energy reiterated its fiscal 2020 earnings guidance in the range of $4.58-$4.73 per share. The Zacks Consensus Estimate for fiscal 2020 earnings is $4.69 per share. Capital expenditure view also remains unchanged and is expected in the range of $1.85-$1.95 billion for fiscal 2020.

Zacks Rank

Atmos Energy currently has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

National Fuel Gas Company (NFG - Free Report) posted second-quarter fiscal 2020 operating earnings of 97 cents per share, on par with the Zacks Consensus Estimate.

Sempra Energy’s (SRE - Free Report) first-quarter 2020 adjusted earnings per share came in at $3.08, surpassing the Zacks Consensus Estimate of $2.32 by 32.8%.

ONEOK Inc. (OKE - Free Report) posted first-quarter 2020 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate of 80 cents by 3.8%.

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