UGI Corp (NYSE: UGI) stock fell 5.40% (as of 11:39 am GMT-4; Source: Google finance) on August 6th, 2019 after the company missed the earnings estimates for the third quarter of FY 19.
UGI in the third quarter of FY 19 has reported the adjusted earnings per share of 13 cents, missing the analysts’ estimates for the adjusted earnings per share of 20 cents, according to the analysts surveyed by Zacks Investment Research. The company had reported the adjusted revenue of $1.36 billion in the third quarter of FY 19.
Moreover, during the third quarter, AmeriGas’ retail volume down 6.7%. Cylinder Exchange and National Accounts volume increased 4.5% and 0.6%, respectively, Incremental expenses related to litigation reserves and correction of a prior-period accounting error. UGI International’s operating income increased due to margin management, the recovery of energy conservation compliance costs, and operating and administrative expense management. Midstream & Marketing has lower baseload capacity values and lower pricing spreads between Marcellus and non-Marcellus delivery points. UGI Utilities has lower operating and administrative expenses.
UGI expects full-year adjusted EPS to be at the lower end of its guidance range of $2.40 to $2.60 per diluted share for the fiscal year ending September 30, 2019.
Meanwhile, UGI has recently said its UGI Energy Services unit completed the previously announced $1.28 billion acquisition of the equity interests of Columbia Midstream Group (Cmg) from a subsidiary of TC Energy. Cmg includes five gathering systems, with capacity of roughly 2.68 million Btus per day (Mmbtu/d), and 240 miles of pipeline, located in the southwestern Appalachian Basin, Kallanish Energy reports. The deal expands UGI’s midstream portfolio. The Pennsylvania-based acquiror expects the transaction to be earnings per share neutral in fiscal year 2020, and accretive beginning in fiscal year 2021 (beginning Oct. 1, 2020), excluding transaction and integration costs. The acquisition offered financial and strategic benefits for the near- and long-term, including the positions UGI Energy Services as a significant operator of midstream assets across the Marcellus and Utica Shale plays from northeastern Pennsylvania through western Pennsylvania, eastern Ohio, and the panhandle of West Virginia. The acquisition will diversify the business by giving UGI Energy Services access to wet gas gathering and processing and expands fee-based revenues. The previously announced acquisition of Columbia Midstream Group closed on August 1st and the merger with AmeriGas received regulatory approval and is expected to close later this quarter.
Further, UGI Utilities filed a joint settlement petition with the PAPUC for a $30 million rate increase on July 22nd. The petition is currently under review by the PAPUC and is anticipated to become effective by early Fall.