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Why Is Ferrellgas Partners, L.P. (FGP) Down 33.8% Since Last Earnings Report?

A month has gone by since the last earnings report for Ferrellgas Partners, L.P. (FGP). Shares have lost about 33.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ferrellgas Partners, L.P. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ferrellgas Partners Posts Wider-Than-Expected Q4 Loss

Ferrellgas Partners reported fourth-quarter fiscal 2018 adjusted loss of 63 cents per unit, wider than the Zacks Consensus Estimate loss of 41 cents.

Total Revenues

In the reported quarter, Ferrellgas Partners' total revenues were $347.5 million, which missed the Zacks Consensus Estimate of $365 million by 4.8%. Also, the top line declined 19.8% from $433.4 million in the prior-year quarter.

Revenues declined primarily due to lower sales in the Midstream operations segment, which slumped 84% from the prior-year quarter's tally. The partnership exited from the midstream and the Global Sourcing businesses in the fiscal fourth quarter, which caused the decline.

Sales in the Propane and other gas liquids segment improved 10.2% year over year. Other segment reported slightly higher sales compared with year-ago quarter's levels.

In fiscal 2018, the partnership delivered revenues worth $2,073.1 million, up from $1,930.2 million in fiscal 2017.

Highlights of the Release

In the reported quarter, nearly 148.1 million gallons of propane were sold, up from 147.9 million gallons in the prior-year quarter. Customer base increased 2.2% year over year. The partnership's current Blue Rhino tank exchange sales locations exceeded 53,000, up more than 10% from the beginning of fiscal 2018 levels.

Operating expenses amounted $121 million, up 10.5% from $109.5 million in the prior-year quarter.

General and administrative expenses amounted to $14.7 million, up from $13.0 million in the prior-year quarter.

Interest expenses were $44.6 million, up from $40.4 million in the prior-year quarter.

The partnership continues to expand operations through acquisitions. It completed five accretive propane acquisitions during fiscal 2018.

Financial Position

Ferrellgas Partners' cash and cash equivalents were $119.3 million as of Jul 31, 2018 compared with $5.8 million as of Jul 31, 2017.

Long-term debt was $2,078.6 million as of Jul 31, 2018 compared with $1,995.8 million as of Jul 31, 2017.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.82% due to these changes.

VGM Scores

Currently, Ferrellgas Partners, L.P. has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Ferrellgas Partners, L.P. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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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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