Atmos Energy Corporation (ATO Quick QuoteATO - Free Report) posted fiscal fourth-quarter 2023 earnings of 80 cents per share, which surpassed the Zacks Consensus Estimate of 74 cents by 8.1%. The bottom line improved 56.9% from the year-ago quarter’s 51 cents.

The year-over-year increase in earnings was due to rate-case outcomes in both Distribution and Pipeline and Storage segments, and customer growth in the Distribution segment. This was partially offset by higher depreciation and property tax expenses owing to increased capital investments.

Revenues

Total revenues of $587.6 million lagged the Zacks Consensus Estimate of $923 million by 36.3%. The top line also decreased 18.7% from the year-ago quarter’s reported number of $723 million.

Segmental Revenues

Distribution: Revenues in third-quarter fiscal 2023 totaled $542.9 million, indicating a 20% decline from $678.9 million in the year-ago quarter.

Pipeline and Storage: Revenues amounted to $205.9 million, implying a 12.1% increase from $183.4 million a year ago.

Highlights of the Release

Operation and maintenance expenses amounted to $190.1 million, down 7.5% from the year-ago quarter’s level.

Operating income totaled $154.1 million in the reported quarter, up 46.2% from the year-ago quarter’s level.

Atmos Energy incurred interest expenses of $31.8 million, up 14.4% year over year.

The company reported 65.9 million cubic feet (“MMcf”) of consolidated distribution throughput for the quarter, down 3.4% from the year-ago quarter’s actual.

Consolidated pipeline and storage transportation volumes came in at 195.5 MMcf, up 15.9% year over year.

ATO Energy increased its quarterly dividend by 8.8% to 80.5 cents, taking the new annualized rate to $3.22 per share.

Financial Highlights

As of Sep 30, 2023, Atmos Energy reported a strong balance sheet with available liquidity of approximately $2.7 billion.

As of Sep 30, 2023, ATO had cash and cash equivalents of $15.4 million compared with $51.6 million as of Sep 30, 2022.

As of Sep 30, 2023, long-term debt was $6,554.1 million compared with $5,760.6 million as of Sep 30, 2022.

Net cash flow provided by operating activities in fiscal 2023 was $3,459.7 million compared with $977.6 million in the year-ago period.

Capital expenditures amounted to $2.8 billion for fiscal 2023, with nearly 85% of the amount being related to system safety and reliability investments.

Guidance

Atmos Energy provided fiscal 2024 earnings guidance in the range of $6.45-$6.65 per share. The Zacks Consensus Estimate for the same is pegged at $6.46 per share, lower than $6.56, the midpoint of the guided range.

ATO expects to invest $17 billion in the fiscal 2024-2028 period.

Zacks Rank

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

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