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ONE Gas (OGS) Q1 Earnings Miss Estimates, Warm Weather Hurts
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ONE Gas Inc. (OGS - Free Report) reported first-quarter 2020 earnings of $1.72 per share, lagging the Zacks Consensus Estimate of $1.78 by 3.4%.
The figure also declined 2.3% from the year-ago earnings, primarily due to warmer weather in its service territories, which in turn adversely impacted demand for natural gas.
Total Revenues
The company recorded total revenues of $528 million in the first quarter, which missed the Zacks Consensus Estimate of $632 million by 16.5%. Revenues also declined 20.1% from the year-ago level.
Natural gas sales volume of 72.6 billion cubic feet (Bcf) in the reported quarter was down 16% year over year, primarily due to warmer weather. Total volumes delivered at the end of the quarter were 138 Bcf, down 9% from the year ago period.
Total operating expenses in the reported quarter were marginally up 0.3% from the year-ago figure to $168.8 million.
Operating income in the reported quarter increased 4.4% year over year to $133.2 million. The improvement was attributed to residential customer growth, and new rates in Kansas and Texas. At the end of the first quarter, the company’s customer base rose 0.8% from the year-ago quarter. The company incurred interest expenses of $15.7 million, down 0.6% from the prior-year figure.
Financial Highlights
As of Mar 31, 2020, ONE Gas had cash and cash equivalents of $11.1 million compared with $17.9 million at the end of 2019.
Long-term debt (excluding current maturities) was $1,286.1 million as of Mar 31, 2020, in line with the 2019-end figure.
The company’s cash flow from operating activities in first-quarter 2020 was $182.7 million compared with $122.9 million in the year-ago period.
Guidance
ONE Gas reiterated its 2020 guidance for net income in the range of $186-$198 million. Its earnings per share guidance are projected in the range of $3.44-$3.68. The midpoint of management’s 2020 EPS guidance is $3.56, lower than the current Zacks Consensus Estimate of $3.60 for the period.
The company expects a negative impact on earnings from lower revenues and net incremental expenses, including bad debt costs associated with the COVID-19 pandemic.
Sempra Energy (SRE - Free Report) is slated to release first-quarter 2020 earnings on May 4. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is pegged at $1.94.
Atmos Energy Corporation (ATO - Free Report) is scheduled to release second-quarter fiscal 2020 results on May 6. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is pegged at $1.94.
National Fuel Gas Company (NFG - Free Report) is set to release second-quarter fiscal 2020 results on May 7. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is pegged at 98 cents.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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ONE Gas (OGS) Q1 Earnings Miss Estimates, Warm Weather Hurts
ONE Gas Inc. (OGS - Free Report) reported first-quarter 2020 earnings of $1.72 per share, lagging the Zacks Consensus Estimate of $1.78 by 3.4%.
The figure also declined 2.3% from the year-ago earnings, primarily due to warmer weather in its service territories, which in turn adversely impacted demand for natural gas.
Total Revenues
The company recorded total revenues of $528 million in the first quarter, which missed the Zacks Consensus Estimate of $632 million by 16.5%. Revenues also declined 20.1% from the year-ago level.
ONE Gas, Inc. Price, Consensus and EPS Surprise
ONE Gas, Inc. price-consensus-eps-surprise-chart | ONE Gas, Inc. Quote
Quarterly Highlights
Natural gas sales volume of 72.6 billion cubic feet (Bcf) in the reported quarter was down 16% year over year, primarily due to warmer weather. Total volumes delivered at the end of the quarter were 138 Bcf, down 9% from the year ago period.
Total operating expenses in the reported quarter were marginally up 0.3% from the year-ago figure to $168.8 million.
Operating income in the reported quarter increased 4.4% year over year to $133.2 million. The improvement was attributed to residential customer growth, and new rates in Kansas and Texas. At the end of the first quarter, the company’s customer base rose 0.8% from the year-ago quarter.
The company incurred interest expenses of $15.7 million, down 0.6% from the prior-year figure.
Financial Highlights
As of Mar 31, 2020, ONE Gas had cash and cash equivalents of $11.1 million compared with $17.9 million at the end of 2019.
Long-term debt (excluding current maturities) was $1,286.1 million as of Mar 31, 2020, in line with the 2019-end figure.
The company’s cash flow from operating activities in first-quarter 2020 was $182.7 million compared with $122.9 million in the year-ago period.
Guidance
ONE Gas reiterated its 2020 guidance for net income in the range of $186-$198 million. Its earnings per share guidance are projected in the range of $3.44-$3.68. The midpoint of management’s 2020 EPS guidance is $3.56, lower than the current Zacks Consensus Estimate of $3.60 for the period.
The company expects a negative impact on earnings from lower revenues and net incremental expenses, including bad debt costs associated with the COVID-19 pandemic.
Zacks Rank
Currently, ONE Gas carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Sempra Energy (SRE - Free Report) is slated to release first-quarter 2020 earnings on May 4. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is pegged at $1.94.
Atmos Energy Corporation (ATO - Free Report) is scheduled to release second-quarter fiscal 2020 results on May 6. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is pegged at $1.94.
National Fuel Gas Company (NFG - Free Report) is set to release second-quarter fiscal 2020 results on May 7. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is pegged at 98 cents.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>