Why Is UGI (UGI) Up 21.3% Since Last Earnings Report?
It has been about a month since the last earnings report for UGI (UGI). Shares have added about 21.3% 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 the most recent earnings report in order to get a better handle on the important catalysts.
UGI Corp's Q2 Earnings Beat Estimates, Revenues Miss
UGI Corporation delivered second-quarter fiscal 2020 adjusted earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.50 by 4%. The bottom line increased 9% from the prior-year quarter’s figure of $1.43.
The company generated GAAP earnings of $1.07 in the reported quarter compared with the year-ago quarter’s GAAP earnings of $1.38.
Revenues
Revenues amounted to $2,228.9 million in the quarter, which missed the Zacks Consensus Estimate of $2,318 million by 3.8%. The top line declined 14.5% from the year-ago quarter’s figure of $2,606.1 million.
Segment Revenues
AmeriGas Propane: The segment generated revenues of $802 million in the quarter under review, down 17.5% from year-ago quarter’s tally.
UGI International: Revenues in the segment amounted to $703.4 million, down 10.2% from year-ago quarter’s figure.
Midstream & Marketing: This segment generated revenues of $422.2 million in the quarter under review, down 22.2% year over year.
UGI Utilities: This segment generated revenues of $392.6 million in the quarter under review, down from year-ago quarter’s reported figure of $429.6 million.
Corporate & Other: This segment incurred a loss of $91.3 million, which was narrower than a loss of $120.7 million in second-quarter fiscal 2019.
Operational Highlights
Volumes in the quarter were significantly hurt due to warmer-than-normal weather in all service territories.
As of Mar 31, the company’s total available liquidity was $1.2 billion. In April, the company increased its dividend for the 33rd consecutive year.
Total interest expenses amounted to $82.4 million, up 35.08% from the prior-year quarter’s tally.
Guidance
The company slashed capital expenditures guidance to $730 million from $850 million for fiscal 2020 considering the impact of the COVID-19 outbreak.
It updated fiscal 2020 adjusted earnings per share guidance to $2.45-$2.55, prior to the COVID-19 impact. It now anticipates that the pandemic could negatively impact earnings by an additional 20-30 cents per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -3000% due to these changes.
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. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, UGI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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