It has been about a month since the last earnings report for Atmos Energy (ATO Quick QuoteATO - Free Report) . Shares have added about 3.1% in that time frame, outperforming the S&P 500.

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

Atmos Energy Q1 Earnings Match Estimates, Revenues Lag

Atmos Energy Corporation posted first-quarter fiscal 2022 earnings per share of $1.86, in line with the Zacks Consensus Estimate.

Reported earnings improved 8.8% from the prior-year figure due to a rate increase in both segments and a positive impact of customer growth in the distribution segment. These upsides were marginally offset by increased system maintenance, depreciation and property tax expenses.

Revenues

Total revenues of $1,013 million lagged the Zacks Consensus Estimate of $1,091 million by 7.1%. However, the top line increased 10.8% from the year-ago reported figure.

Segment Revenues

Distribution: Revenues from the segment increased 10.9% to $972.4 million from $876.7 million in the prior-year quarter.

Pipeline and Storage: Revenues from the segment increased 2% to $162.9 million from $159.7million in the year-ago quarter.

Highlights of the Release

The purchased gas cost for the quarter was $371.2 million, up 28.8% from the year-ago period. Operation and maintenance expenses for the quarter were $159.1 million, up 14.8% from the year-ago period.

Operating income for the reported quarter was down 7.7% year over year to $275.9 million.

Atmos Energy incurred interest expenses of $19.9 million, down 0.5% from the year-ago period.

As of Dec 31, 2021, Atmos Energy had cash and cash equivalents of $264 million. ATO generated operating cash flow of $61.8 million, a $95.2-million decrease compared with the year-ago reported figure. This was primarily due to the timing of gas cost recoveries under purchase gas cost mechanisms, partially offset by positive effects of successful rate case outcomes achieved in fiscal 2021.

As of Dec 31, 2021, Atmos Energy’s available liquidity was $3.1 billion.

Atmos Energy invested $684.2 million in the first quarter of fiscal 2022 to strengthen operations. Nearly 88% of capital spending was associated with system safety and increased reliability of services.

Guidance

Atmos Energy reiterated its fiscal 2022 earnings guidance in the range of $5.40-$5.60 per share. The Zacks Consensus Estimate for fiscal 2022 earnings of $5.52 per share is higher than $5.50, which is the midpoint of the guided range. ATO expects capital expenditure in the range of $2.4-$2.5 billion for fiscal 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Atmos has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Atmos has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.