A distributor of propane and related equipment, Ferrellgas Partners L.P. FGP is scheduled to report first-quarter fiscal 2016 results before the market opens on Dec 9. In the last quarter, the company posted a negative earnings surprise of 118.28%. Let’s see how things are shaping up for this announcement.
Factors to Influence this Quarter
Acquisitions have always been a key element of growth at Ferrellgas Partners. On Jul 9, the partnership completed the acquisition of Propane Advantage, LLC, taking its tally to nearly 235 acquisitions to date. This acquisition helped the partnership to make an entry in the rapidly developing Salt Lake City market. The partnership’s acquisition driven growth and presence across the U.S. puts it in an advantageous position compared to other small-scale propane distributors.
In Jun 2015, Ferrellgas Partners expanded its midstream business through the acquisition of Bridger Logistics, LLC for nearly $822.5 million. The acquisition is expected to boost the partnership’s performance with the inclusion of integrated crude oil midstream services.
Ferrellgas Partners operates in a very competitive environment. Also, energy efficiency drives and advancement in technology may have a negative impact on the demand for propane.
Earnings Whispers?
Our proven model does not conclusively show that Ferrellgas Partners is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Ferrellgas Partners has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 8 cents.
Zacks Rank: Ferrellgas Partners’ Zacks Rank #1 increases the possibility of a positive surprise. However, a 0.00% ESP makes surprise prediction difficult.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat:
Valero Energy Corporation VLO has an Earnings ESP of +10.29% and carries a Zacks Rank #3.
Tesoro Corporation TSO has an Earnings ESP of +9.22% and carries a Zacks Rank #3.
PBF Energy Inc. PBF has an Earnings ESP of +1.96% and carries a Zacks Rank #3.
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