A month has gone by since the last earnings report for National Fuel Gas (NFG). Shares have added about 2.4% 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 the most recent earnings report in order to get a better handle on the important catalysts.
National Fuel Gas Posts In-Line Q2 Earnings, Cuts View
National Fuel Gas Company posted second-quarter fiscal 2020 operating earnings of 97 cents per share, on par with the Zacks Consensus Estimate. However, earnings declined 9.3% from the year-ago figure of $1.07 per share.
Total revenues of $491 million missed the Zacks Consensus Estimate of $598 million by 17.9%. The top line also decreased 11.2% from the prior-year figure of $553 million.
Highlights of the Release
Total operating costs in the reported quarter increased 29.2% from the year-ago level to $515.7 million, owing to impairment of oil and gas producing properties.
Total production in the reported quarter was 59.8 billion cubic feet equivalent (Bcfe), up 23% from the year-ago period. In the reported quarter, prices of natural gas and oil were lower than the prior-year period. However, low commodity prices did not allow the company to enjoy the full benefits of increased production volumes.
It incurred interest expenses of $25.7 million, which was in line with the year-ago figure.
As of Mar 31, 2020, National Fuel Gas had cash and cash equivalents of $111.7 million compared with $20.4 million on Sep 30, 2019.
Long-term debt (excluding current maturities) was $2,134.9 million as of Mar 31, 2020 compared with the Sep 30, 2019 level of $2,133.7 million.
The company’s cash flow from operating activities in the first six months of fiscal 2020 was $390.9 million, up from $340.9 million recorded in the comparable year-ago period.
Total capital expenditure in the first six months of fiscal 2020 was $395.5 million, up 2.3% from the comparable year-ago period.
National Fuel Gas revised its fiscal 2020 earnings guidance to the range of $2.75-$2.95 from the prior expectation of $2.95-$3.15. The mid-point of the guidance is 8 cents lower than the Zacks Consensus Estimate of $2.85.
The company now expects Exploration and Production capital expenditures for fiscal 2020 in the range of $375-$395 million. Notably, it has lowered the upper end of the previous guided range by $15 million.
National Fuel Gas lowered its fiscal 2020 capital expenditure guidance to the range of $680-$740 million from the earlier projection of $695-$785 million.
The company also lowered its fiscal 2020 net production expectation to the range of 230-240 Bcfe from 235-245 Bcfe projected earlier.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted -8.38% due to these changes.
At this time, National Fuel Gas has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
National Fuel Gas has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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