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Atmos Energy (ATO) Q3 Earnings Beat Estimates, Revenues Miss

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Atmos Energy Corporation (ATO - Free Report) posted third-quarter fiscal 2020 earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate of 76 cents by 3.9%.

The reported earnings also improved 16.2% from the prior-year figure. The year-over-year improvement in earnings was due to positive rate outcomes in both the segments, and lower operation and maintenance expenses in the distribution segment.

Total Revenues

Total revenues of $492.9 million missed the Zacks Consensus Estimate of $621 million by 20.6%. However, the top line increased 1.5% from the year-ago figure of $485.8 million.

Atmos Energy Corporation Price, Consensus and EPS Surprise

Atmos Energy Corporation Price, Consensus and EPS Surprise

Atmos Energy Corporation price-consensus-eps-surprise-chart | Atmos Energy Corporation Quote

Segment Revenues

Distribution: Revenues from the segment decreased 2.2% to $435.3 million from $444.9 million in the prior-year quarter.

Pipeline and Storage: Revenues from the segment increased 5.9% to $158 million from $149.2 million in the year-ago quarter. The improvement was driven by an increase in rates, marginally offset by a rise in depreciation expenses.

Quarterly Highlights

Purchased gas cost in the quarter was $26.1 million, down 16.6% from the year-ago period. Operation and maintenance expenses for the quarter were $149.5 million, down 9.1% from the year-ago period.

Operating income for the reported quarter was up 13.8% year over year to $139.1 million.

The company incurred interest expenses of $19.6 million, on par with the year-ago period.

Financial Highlights

As of Jun 30, 2020, Atmos Energy had cash and cash equivalents of $208.6 million compared with $24.6 million on Sep 30, 2019.

Long-term debt was $4.53 billion as of Jun 30, 2020, up from $3.53 billion on Sep 30, 2019.

The company’s cash flow from operating activities for the first nine months of fiscal 2020 was $895.5 million, up from $808.9 million recorded in the comparable year-ago period.

It invested $1,405.7 million in the first nine months of fiscal 2020 to strengthen operations. The figure was up 17% from the year-ago period. Nearly 88% of the capital spending was related to system safety and increased reliability of its services.

Guidance

Atmos Energy reiterated its fiscal 2020 earnings guidance in the range of $4.58-$4.73 per share. The Zacks Consensus Estimate for fiscal 2020 earnings is $4.69 per share. Capital expenditure view also remains unchanged and is expected in the range of $1.85-$1.95 billion for fiscal 2020.

Zacks Rank

Atmos Energy currently has a Zacks Rank #4 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Plains All American Pipeline (PAA - Free Report) posted second-quarter 2020 operating earnings of 25 cents per unit, which lagged the Zacks Consensus Estimate by 10.7%.

Sempra Energy’s (SRE - Free Report) second-quarter 2020 adjusted earnings per share came in at $1.65, lagging the Zacks Consensus Estimate of $1.66 by 0.6%.

ONEOK Inc. (OKE - Free Report) posted second-quarter 2020 operating earnings of 32 cents per share, which missed the Zacks Consensus Estimate of 50 cents by 36%.

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