Ferrellgas Partners Crushes Estimates

Seth Jayson, The Motley Fool
Updated

Ferrellgas Partners (NYS: FGP) reported earnings on Dec. 9. Here's what you need to know.

The 10-second takeaway
For the quarter ended Oct. 31 (Q1), Ferrellgas Partners crushed expectations on revenues and met expectations on earnings per share.

  • Gross margins contracted, operating margins narrowed, and net margins expanded.

Revenue
Ferrellgas Partners chalked up revenue of $538 million. The two analysts polled by S&P Capital IQ wanted to see net sales of $406 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS
Non-GAAP EPS came in at -$0.42. The six earnings estimates compiled by S&P Capital IQ averaged -$0.30 per share on the same basis. GAAP EPS were -$0.43 for Q1 against -$0.40 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margins
For the quarter, gross margin was 23.9%, 880 basis points worse than the prior-year quarter. Operating margin was -1.8%, 120 basis points worse than the prior-year quarter. Net margin was -6.1%, 80 basis points better than the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $846 million. On the bottom line, the average EPS estimate is $0.97. (There are two revenue estimates and six EPS estimates.)

For the full year ending 2012, the average estimate for revenue is $2.5 billion. The average EPS estimate is $0.59. (There are two revenue estimates and three EPS estimates.)

Investor sentiment
The stock has a two-star rating at Motley Fool CAPS, with 117 members out of 154 rating the stock outperform and 37 members rating it underperform. Among 48 CAPS All-Star picks, 34 give Ferrellgas Partners a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ferrellgas Partners is underperform, with an average price target of $19.50.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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