UGI Earnings: Double-Digit Net Income and Revenue Growth

UGI Corp. (NYSE:UGI) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. Yet, investors cheered the solid net income and revenue growth. Shares are up 0.48%.

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UGI Corp. Earnings Cheat Sheet

Results: Net income increased 17.93% to $102.6 million (90 cents per diluted share) in the quarter versus a net gain of $87 million in the year-earlier quarter.

Revenue: Rose 19.61% to $2.02 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: UGI Corp. reported adjusted net income of 90 cents per share. By that measure, the company missed the mean analyst estimate of $1.04. It missed the average revenue estimate of $2.28 billion.

Quoting Management:

Lon R. Greenberg, chairman and chief executive officer of UGI, said, “Although warmer than normal, the weather experienced by each of our business units during the quarter was colder, on average, than that experienced last year. AmeriGas’s earnings contribution increased over 50%, primarily reflecting the impact of the Heritage Propane acquisition. Gas Utility’s 14% year-over-year improvement in earnings contribution reflected both colder weather and, to a lesser extent, the net impact of customer additions in fiscal 2012. Our International Propane business also reported earnings that were 14% above last year primarily due to colder weather in France and the benefits associated with acquisitions completed last year in the UK, Scandinavia and the Benelux countries. Finally, our Midstream & Marketing business reported improved results primarily associated with its electric generation business.” Weather during the quarter was warmer than normal across all of UGI’s operating territories and in particular across the United States and in France. Weather during the month of December was substantially warmer than normal across the United States (13.1% warmer than normal) and in Gas Utility’s service territory (14.4% warmer than normal)…

…We are pleased to see a significant rebound in earnings from last year’s quarter. Although all of our businesses performed quite well during the quarter, the impact of substantially warmer than normal December weather on our domestic business units resulted in earnings that were slightly below our expectations. We remain optimistic about the earnings potential of our businesses assuming reasonably normal temperatures for the remainder of the heating season. Based upon our results to date and our assessment of business conditions for the remainder of fiscal 2013, we are making a modest revision to our earnings guidance and we now expect to report earnings in the range of $2.40 to $2.50 per diluted share for fiscal 2013.”

Key Stats:

Revenue increased 79.44% from $1.13 billion in the previous quarter. Net income increased to $102.6 million in the quarter versus a net loss of $14.7 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.46 to a profit $1.47. For the current year, the average estimate has moved up from a profit of $2.49 to a profit of $2.53 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)