3Q Earnings Beat at Ferrellgas - Analyst Blog

By Zacks Equity Research,

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Ferrellgas Partners LP ( FGP ) reported earnings per unit of 59 cents for the third quarter of fiscal 2013, ending Apr 30, up 15.9% from the Zacks Consensus Estimate of 51 cents. Earnings in the quarter were substantially higher than the prior-year figure of 27 cents.

Total Revenue

Ferrellgas Partners' total revenue of $603 million in the quarter was 4.2% lower than $629.6 million reported in the comparable year-ago period.

The lower propane price impacted propane and other gas liquids sales, which decreased 8.6% to $508.4 million while Other revenues increased 29.8% to $94.6 million.

Revenues were higher than the Zacks Consensus Estimate of $589 million.

Operating Highlights

The gross profit of the partnership in the reported quarter improved 24.7% to $223.1 million. The solid performance encouraged the partnership to make an upward revision in its EBITDA guidance for fiscal 2013. The new expectation is in a range of $270 million to $275 million.

Operating income in the reported quarter was $69.1 million, up 51.9% from $45.5 million reported in the prior-year period.

The low cost of borrowing benefited the partnership. Interest expenses decreased 5.9% to $22.1 million.

Financial Highlights

Cash and cash equivalents as of Apr 30, 2013, were $12.3 million versus $8.4 million as of Jul 31, 2012.

The partnership's long-term debt as of Apr 30, 2013, was $1.07 billion, increasing marginally from $1.05 billion as of Jul 31, 2012.

Other Company Releases

Suburban Propane Partners LP ( SPH ) reported second quarter fiscal 2013 earnings per unit of $2.37, lagging the Zacks Consensus Estimate of $2.49 by 4.8%.

Delek US Holdings, Inc. ( DK ) announced first quarter operating earnings of $1.28 per share, up 7.6% from the Zacks Consensus Estimate of $1.19.

Alon USA Energy, Inc. ( ALJ ) announced first quarter operating earnings of 80 cents per share, beating the Zacks Consensus Estimate by 63.3%.

Our View

The partnership continued to reap the benefits of an acquisition-based growth strategy. Ferrellgas completed the acquisition of Mr. Bar-B-Q, in the third quarter of fiscal 2013. This acquisition will help in further expansion of its Blue Rhino products business.

The overall results of the partnership in the first nine months of the fiscal were better than the comparable prior-year period. The operational efficiency of the partnership resulted in reduction in fixed overhead expenses. In addition, the return of normal weather boosted the demand for propane.

Overland Park, Ks. based Ferrellgas Partners LP is a leading distributor of propane and related equipment in the U.S. The partnership provides propane services to Residential, Industrial, Portable Tank Exchange, Agricultural and Wholesale customers. Ferrellgas Partners currently has a Zacks Rank #2 (Buy).

ALON USA ENERGY (ALJ): Free Stock Analysis Report

DELEK US HLDGS (DK): Free Stock Analysis Report

FERRELLGAS -LP (FGP): Free Stock Analysis Report

SUBURB PROPANE (SPH): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: ALJ , DK , FGP , SPH

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