Ferrellgas Partners LP FGP reported second-quarter fiscal 2015 adjusted earnings of $1.02 per unit, missing the Zacks Consensus Estimate of $1.10 by 7.3%. Quarterly earnings, however, increased 34.2% from 76 cents per unit a year ago, primarily on the back of lower cost of product sold (propane and other gas liquids sales) and a decline in operating expenses.
Total Revenue
In the quarter under review, Ferrellgas Partners’ total revenue came in at around $666 million, lagging the Zacks Consensus Estimate of $819 million by 18.7%. On a year-over-year basis, the partnership’s top line plunged 23.4% primarily due to lower propane and other gas liquids sales. This was partially offset by higher Other sales and strong contribution from midstream operations.
Operational Highlights
In the second quarter, total propane sales volume dipped 13.3% year over year to 297.3 million gallons, primarily due to lower retail sales that resulted from warmer weather.
Ferrellgas Partners’ gross profit stood at around $265 million in the reported quarter, down 1.7% from $269.5 million a year ago.
Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) in the second quarter edged up 0.4% year over year to $136.9 million.
Operating expenses of the partnership was $107.1 million, down 8.2% from the prior-year figure.
Interest expenses surged 10.3% year over year to $24.4 million, primarily due to the issuance of new debt to finance acquisitions and capital expenditure.
Financial Highlights
Ferrellgas Partners’ cash and cash equivalents as of Jan 31, 2015 were $12.4 million versus $8.3 million as of Jul 31, 2014.
Long-term debt as of Jan 31, 2015 was $1,343.5 million, up from $1,292.2 million as of Jul 31, 2014.
In the first six months of fiscal 2015, the partnership’s net cash from operating activities was $13.7 million compared with net cash used in operating activities of $70.2 million a year ago.
Capital expenditure in the first half of fiscal 2015 was at $29.4 million versus $22.9 million in the prior-year quarter.
Guidance
Ferrellgas Partners reiterated its fiscal 2015 EBITDA guidance in the range of $300 million to $320 million.
At its Peer
Calumet Specialty Products Partners LP CLMT reported earnings of 86 cents per unit in the fourth quarter of 2014, surpassing the Zacks Consensus Estimate of 6 cents significantly.
Zacks Rank
Ferrellgas Partners currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Global Partners LP GLP and Marathon Petroleum Corp. MPC. Global Partners holds a Zacks Rank #1 (Strong Buy), while Marathon Petroleum sports a Zacks Rank #2 (Buy).
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