UGI (UGI) Up 3.1% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
·3-min read

A month has gone by since the last earnings report for UGI (UGI). Shares have added about 3.1% in that time frame, underperforming the S&P 500.

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

UGI Q2 Earnings Surpass Estimates, Revenues Decline Y/Y

UGI Corporation reported fiscal second-quarter 2024 operating earnings of $1.97 per share, which surpassed the Zacks Consensus Estimate of $1.65 by 19.4%. The bottom line also increased 17.3% from the year-ago quarter’s level of $1.68.

Total Revenues

Revenues of $2.47 billion missed the Zacks Consensus Estimate of $3.37 billion by 26.8%. The top line also declined 20.6% from the year-ago quarter’s figure of $3.11 billion.

Segmental Results

AmeriGas Propane: Revenues of $795 million were down 8.3% from the year-ago quarter. Retail gallons sold during the quarter decreased 6% year over year due to warmer weather and continued customer attrition.

UGI International: Revenues totaled nearly $673 million, down 29% from the year-ago level. Retail volume decreased 0.5% year over year.

Midstream & Marketing: Revenues of $483 million were down 24.3% year over year.

UGI Utilities: Sales of $646 million were down 16.5% from the figure registered in the year-ago period.

Corporate & Other: This segment incurred a loss of $130 million, wider than the prior-year quarter’s loss of $121 million.

Highlights of the Release

The company reported strong second-quarter results despite warmer-than-normal weather across its service territories, led by higher margins from natural gas marketing activities in its Midstream & Marketing business and reduced operating expenses across the entity.

Total interest expenses came in at $100 million, up 7.5% from the year-ago quarter’s $93 million.

Guidance

UGI issued its fiscal 2024 adjusted earnings guidance in the range of $2.70-$3 per share. The Zacks Consensus Estimate for the same is pegged at $2.90 per share, which is higher than $2.85, the midpoint of the company’s guided range.

UGI is a high-performing, customer-centered and result-driven organization, targeting a long-term EPS growth rate of 4-6%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -137.04% due to these changes.

VGM Scores

At this time, UGI has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, UGI has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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