National Fuel Gas Q3 Earnings Beat, Sales Decline Y/Y

National Fuel Gas Company NFG reported third-quarter fiscal 2024 adjusted operating earnings of 99 cents per share, which surpassed the Zacks Consensus Estimate of 92 cents by 7.6%. However, the bottom line decreased 2% from the year-ago quarter's reported figure of $1.01.

GAAP earnings for the quarter were 59 cents per share, down 41% from the year-ago level of $1.00.

Total Revenues

NFG reported sales of $417.4 million, which missed the Zacks Consensus Estimate of $528 million by 20.9%. The top line also declined 2.6% from the prior-year recorded figure of $428.7 million.

Segmental Revenues

Utility: Revenues totaled $124.8 million, down 13.6% from $144.5 million in the year-ago quarter.

Exploration and Production and Other Revenues: Revenues totaled $220.9 million, up 2% from $216.6 million in the year-ago quarter.

Pipeline and Storage and Gathering: Revenues amounted to $71.7 million, implying a 6.1% increase from $67.6 million recorded in the year-ago quarter.

Highlights of the Release

Total operating expenses increased 70.7% to $468.9 million year over year. This was primarily due to higher operation and maintenance expenses and higher depreciation and amortization.

Operating loss was $51.4 million against an income of $154.1 million in the year-ago quarter.

Interest expenses totaled $32.9 million, up 25.1% from the year-ago figure of $26.3 million.

The Exploration & Production segment produced 96.5 billion cubic feet (Bcf) of natural gas, up 2% year over year despite approximately 5.6 Bcf of price-related curtailments in the quarter.

Financial Highlights

As of Jun 30, 2024, National Fuel Gas had cash and temporary cash investments of $81.4 million compared with $55.4 million as of Sep 30, 2023.

Net cash provided by operating activities for the first nine months of fiscal 2024 totaled $0.87 billion compared with $1.06 billion in the year-ago period.

Capital expenditures amounted to $684.2 million in the first nine months of fiscal 2024 compared with $727.7 million in the year-ago period.

Guidance

NFG narrowed its fiscal 2024 earnings projection to the range of $5.00-$5.10 per share from the previously anticipated $4.75-$5.05. The company expects its fiscal 2025 earnings to be in the range of $5.75-$6.25 per share. The Zacks Consensus Estimate for the same is pegged at $6.05 per share.

The company expects its capital expenditure for fiscal 2024 and 2025 to be in the range of $890-970 million and $885-970 million, respectively.

It lowered its production volume expectation to the band of 390-400 Bcf from the previously anticipated 390-405 Bcf, and the same for 2025 is estimated to be in the range of 400-420 Bcf.

Zacks Rank

National Fuel Gas currently carries a Zacks Rank #1 (Strong Buy).

Upcoming Releases

ONE Gas, Inc. OGS is slated to report second-quarter 2024 results on Aug 5, after market close. The Zacks Consensus Estimate for second-quarter earnings is pegged at 49 cents per share.

OGS' long-term (three to five years) earnings growth rate is 5%. It delivered an average earnings surprise of 0.9% in the past four quarters.

Southwest Gas SWX is slated to report second-quarter 2024 results on Aug 6, before market open. The Zacks Consensus Estimate for earnings is pegged at 43 cents per share.

SWX's long-term earnings growth rate is 6%. It delivered an average earnings surprise of 104.4% in the past four quarters.

Atmos Energy Corporation ATO is slated to report third-quarter fiscal 2024 results on Aug 7, after market close. The Zacks Consensus Estimate for earnings is pegged at $1.05 per share.

ATO's long-term earnings growth rate is 7%. It delivered an average earnings surprise of 3.3% in the past four quarters.

To read this article on Zacks.com click here.