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National Fuel Gas (NFG) Down 4.3% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for National Fuel Gas (NFG). Shares have lost about 4.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is National Fuel Gas 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.

National Fuel Gas Q4 Earnings & Sales Lag Estimates

National Fuel Gas Company reported fiscal fourth-quarter 2023 adjusted operating earnings of 78 cents per share, which missed the Zacks Consensus Estimate of 83 cents by 6%. The bottom line declined 34.5% from the year-ago figure of $1.19.

GAAP earnings in the quarter were 80 cents per share, down 53.2% from the year-ago level of $1.71.

Total Revenues

Sales of $368.9 million lagged the Zacks Consensus Estimate of $446 million by 17.3%.

The top line decreased 15.2% from the prior-year figure of $435.1 million. The year-over-year fall was primarily due to lower realized natural gas prices, higher operating expenses and higher income tax expenses in the upstream business.

Highlights of the Release

Total operating expenses decreased 5.3% to $243.6 million year over year.

Operating income was down 29.5% year over year to $125.3 million.

Interest expenses totaled $28.4 million, down 6% from the year-ago figure of $30.2 million.

Financial Highlights

As of Sep 30, 2023, National Fuel Gas had cash and temporary cash investments of $55.4 million compared with $46.1 million as of Sep 30, 2022.

Long-term debt (excluding current maturities) was $2,384.5 million as of Sep 30, 2023, compared with $2,083.4 million as of Sep 30, 2022.

Net cash provided by operating activities for fiscal 2023 was $1,237.1 million compared with $812.5 million a year ago.

Total capital expenditures in fiscal 2023 totaled $1,009.9 million compared with $811.8 million in fiscal 2022.

Guidance

National Fuel Gas revised its fiscal 2024 earnings guidance to the range of $5.40-$5.90 per share from $5.50-$6.00. The Zacks Consensus Estimate for the same is pegged at $5.61 per share.

NFG expects capital expenditures in the range of $865-$975 million for fiscal 2024. It expects production volume in the band of 390-410 billion cubic feet equivalent for the same year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, National Fuel Gas 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 A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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, National Fuel Gas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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