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Ferrellgas Q4 Loss Wider than Expected, Revenues Beat

Ferrellgas Partners LP FGP reported a fourth-quarter fiscal 2015 adjusted loss of 48 cents per unit, wider than the Zacks Consensus Estimate of a loss of 22 cents per unit. The quarterly loss was narrower than a loss of 58 cents per unit in the year-ago quarter.

Ferrellgas Partners LP - Earnings Surprise | FindTheBest

Net earnings for fiscal 2015 were 35 cents per common unit, lagging the Zacks Consensus Estimate of $1.16 by 70%. Earnings also fell 14.6% year over year.

Total Revenue

During the quarter, Ferrellgas Partners' total revenue came in at $382.5 million, topping the Zacks Consensus Estimate of $375 million. However, on a year-over-year basis, the partnership's top line dropped 4.1%, primarily due to a lower contribution from Propane and other gas liquid sales.

Total revenue for the fiscal was $2,024.4 million, down from $2,405.9 million a year ago.

Operational Highlights

In the fiscal fourth quarter, total propane sales volume declined 3.7% year over year to 149 million gallons due to lower wholesale and retail sales. Sales decreased due to warmer temperature throughout the year in most of the highly concentrated geographic areas it serves.

Total propane sales volume for the fiscal year declined 7.1% on a year-over-year basis to 878.8 million gallons.

Ferrellgas Partners' gross profit was $160.9 million in the reported quarter, up 8.4% from $148.4 million a year ago.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the fiscal fourth quarter increased 27.8% year over year to $32.62 million.

Yearly adjusted EBITDA increased by 4.2% to $300.2 million due to lower operating expenses and substantial contributions from the Bridger acquisition.

Operating expense in the reported quarter was $115.4 million, up 2.5% from the prior-year level. However, fiscal operating expense of $432.3 million was down 3.1% due largely to the partnership's ability to cut down on variable delivery costs, including personnel and fuel cost, which more than offset additional operating expenses associated with the full-year impact of the midstream water solutions acquisition in May 2014 and the impact of Bridger Logistics acquisition in the fiscal fourth quarter.

Quarterly interest expenses rose 29.4% year over year to $28.6 million.

Quarterly general and administrative expenses shot up 155% to $26.7 million from $10.9 million.

Financial Position

Ferrellgas Partners' cash and cash equivalents were $7.6 million as of Jul 31, 2015 compared with $8.3 million as of Jul 31, 2014. Long-term debt was $1,804.4 million as of Jul 31, 2015, up from $1,292.2 million as of Jul 31, 2014.

Bridger Acquisition

During the fiscal fourth quarter, Ferrellgas closed the acquisition of Bridger Logistics, LLC for $822.5 million. Management perceives this acquisition to yield significant diversification synergies in the near term.

Upcoming Releases

Northern Tier NTI is slated to report third quarter earnings on Nov 3, 2015. The Zacks Consensus Estimate is $ 1.07.

Marathon Petroleum Corp. MPC is slated to report third quarter earnings on Oct 29, 2015. The Zacks Consensus Estimate is $1.62.

Zacks Rank

Currently, Ferrellgas Partners carries a Zacks Rank #4 (Sell). Alon USA Partners, LP ALDW is a favorably placed stock in the same industry sporting a Zacks Rank #1 (Strong Buy).

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FERRELLGAS -LP (FGP): Free Stock Analysis Report

MARATHON PETROL (MPC): Free Stock Analysis Report

NORTHERN TIER (NTI): Free Stock Analysis Report

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


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

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