Ferrellgas Partners (FGP) Q1 Loss Narrower Than Expected

Ferrellgas Partners LP (NYSE:FGP) reported first-quarter fiscal 2017 adjusted loss of 44 cents per unit, narrower than the Zacks Consensus Estimate of a loss of 51 cents. Quarterly loss was also narrower than the year-ago loss of 79 cents.

The bottom line deteriorated mainly due weak demand for propone as a result of 35% warmer temperatures than usual.

Total Revenue

In the reported quarter, Ferrellgas Partners’ total revenue came in at $379.5 million, beating the Zacks Consensus Estimate of $357million by 6.2%.

However on a year-over-year basis, the partnership’s top line declined 44.2% primarily due to weak midstream operations, apart from lower sales of propane and other gas liquids, because of the adverse impact of above-average temperatures.

Highlights of the Release

Operating expenses in the reported quarter were $104.9 million, down 8.7% from the prior-year level.

General and administrative expenses for the quarter under review increased 1.9% to $12.5 million from $12.3 million in the prior-year period.

Interest expenses increased to $35.4 million in the quarter from $33.8 million a year ago, reflecting increased borrowings to fund acquisitions.

Financial Position

Ferrellgas Partners’ cash and cash equivalents were $12.6 million as of Oct 31, 2016, compared with $4.9 million as of Jul 31, 2016.

Long-term debt was $1,965.2 million as of Oct 31, 2016, up from $1,941.3 million as of Jul 31, 2016.

Price Movement

Over the past one year, Ferrellgas Partners, LP has underperformed the Zacks categorized Oil Refining and Marketing MLP industry. During this period, the partnership’s units lost 62.3%, compared with the industry’s return of 1.8%.

Ferrellgas Partners’ units fell significantly during the fourth quarter of fiscal 2016 after the partnership reported a much wider-than-expected loss. It has also been facing challenging times of late due to the loss of its largest customer as well as general market conditions.

Peer Releases

Sunoco LP (NYSE:SUN) reported third-quarter 2016 earnings of 24 cents per unit, lagging the Zacks Consensus Estimate of 39 cents by 38.5%.

Genesis Energy LP (NYSE:GEL) reported third-quarter 2016 earnings of 28 cents per unit, lagging the Zacks Consensus Estimate of 31 cents by 9.7%.

Global Partners LP (NYSE:GLP) reported third-quarter 2016 earnings of 3 cents per unit, beating the Zacks Consensus Estimate of a loss of 1 cent by 400%.

Zacks Rank

Ferrellgas Partners currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>