A month has gone by since the last earnings report for National Fuel Gas (NFG). Shares have lost about 3.2% 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 its most recent earnings report in order to get a better handle on the important drivers.
National Fuel Gas Q2 Earnings Disappoint, Sales Rise Y/Y
National Fuel Gas Company reported fiscal second-quarter 2023 adjusted operating earnings of $1.54 per share, which missed the Zacks Consensus Estimate of $1.55 by 0.6%. The bottom line also declined 8.3% from the year-ago figure of $1.68.
GAAP earnings for the quarter were $1.53 per share, down 16% from the year-ago level of $1.82.
Sales of $717.3 million beat the Zacks Consensus Estimate of $686 million by 4.5%.
The top line also improved 2.2% from the prior-year figure of $701.7 million. The year-over-year rise was primarily due to higher contributions from NFG’s Utility segment.
Highlights of the Release
Total operating expenses increased 8.9% to $495.9 million year over year. This was primarily due to price hikes in purchased gas expenses.
Operating income was down 10.1% year over year to $221.4 million.
Interest expenses totaled $27.6 million, down 8.3% from the year-ago figure of $30.1 million.
As of Mar 31, 2023, National Fuel Gas had cash and temporary cash investments of $71.5 million compared with $46.1 million as of Sep 30, 2022.
Long-term debt (excluding current maturities) was $2,085.2 million as of Mar 31, 2023, compared with $2,083.4 million as of Sep 30, 2022.
Net cash provided by operating activities in the first six months of fiscal 2023 was $711.2 million compared with $425.6 million in the year-ago period.
Total capital expenditures in the same time frame totaled $496.4 million compared with $415.4 million in the corresponding period of 2022.
National Fuel Gas revised its fiscal 2023 earnings guidance to the range of $5.10-$5.40 per share from $5.35-$5.75 per share. The Zacks Consensus Estimate for the same is pegged at $5.11 per share.
NFG expects capital expenditures in the $830-$940 million range for fiscal 2023. It continues to expect production volume in the band of 370-390 billion cubic feet equivalent (Bcfe) for the same year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.33% due to these changes.
Currently, National Fuel Gas has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, National Fuel Gas has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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