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ONE Gas (OGS) Q3 Earnings Miss Estimates, Revenues Rise Y/Y

Zacks Equity Research

ONE Gas OGS reported third-quarter 2019 earnings of 33 cents per share, which lagged the Zacks Consensus Estimate of 34 cents by 2.94%.

Nevertheless, the figure rose 6.45% from the year-ago quarter’s level driven by new rates and residential customer growth.

Total Revenues

The company recorded total revenues of $249 million in the third quarter, which missed the Zacks Consensus Estimate of $254 million by nearly 1.97%.

However, revenues improved 4.62% from the year-ago quarter’s level.  The upside can be attributed to higher natural gas sales volumes and natural gas transportation volumes.

ONE Gas, Inc. Price, Consensus and EPS Surprise

 

ONE Gas, Inc. Price, Consensus and EPS Surprise

ONE Gas, Inc. price-consensus-eps-surprise-chart | ONE Gas, Inc. Quote

 

Quarterly Highlights

Total operating expenses in the reported quarter increased 6.2% from the year-ago quarter’s figure to $160.2 million.

Operating income in the reported quarter increased 7.2% year over year to $38.8 million.

The company incurred interest expenses of $15.8 million, up 27.6% from the prior-year quarter’s figure. Increase in expenses was caused by refinancing of the company's senior notes.

Financial Highlights

At the end of third quarter, ONE Gas had cash and cash equivalents of $12.6 million compared with $21.3 million at 2018-end.

Long-term debt (excluding current maturities) was $1,285.9 million as of Sep 30  2019, up from Dec 31, 2018 level of $1,285.5 million.

The company’s cash flow from operating activities in the first nine months of 2019 was $288.5 million compared with $436.8 million in the year-ago period.

Guidance

ONE Gas has maintained its guidance declared on Jul 29, 2019 with net income projected in the range of $180-$190 million. The earnings per share (EPS) guidance is in the range of $3.39-$3.57. The midpoint of management’s 2019 EPS guidance is $3.48, lower than the current Zacks Consensus Estimate of $3.5 for the period.

The company has set its capital expenditures guidance, including asset removal costs, at nearly $450 million in 2019. Out of this, 70% of these expenditures will be directed toward system integrity and replacement projects.

Zacks Rank

Currently, ONE Gas carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

ONEOK OKE is set to release third-quarter 2019 results on Oct 30. The Zacks Consensus Estimate for earnings is pegged at 74 cents.

Sempra Energy SRE is scheduled to release third-quarter 2019 results on Nov 1. The Zacks Consensus Estimate for Earnings is pegged at $1.49.

Atmos Energy Corporation ATO is lined up to release third-quarter 2019 results on Nov 7. The Zacks Consensus Estimate for Earnings is at 48 cents.

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