Ferrellgas Partners L.P. (FGP) posted better than expected results for the first quarter of 2010, primarily driven by higher propane sales and lower costs. The partnership recorded a net loss of 22 cents per unit for the quarter, better than a net loss of 32 cents estimated by Zacks Consensus. Ferrellgas sold 179.5 million gallons of propane during the quarter, up 4.3% from a year ago.
However, revenues declined 27% to $352.1 million due to lower wholesale propane costs. Gross profit in the quarter was practically unchanged from last year, while gross margin expanded to 41% from 30% recorded during the year-ago quarter due to lower cost of sales (down 38%).
Operating income came down to $6.3 million from $9.2 million a year ago, largely driven by higher general and administrative expenses (up 51%) and stock-based compensation charges (up 18%) partially offset by equipment lease expenses (down 30%). Ferrellgas reported adjusted EBITDA of $33.2 million compared to the exceptionally strong, year-earlier record of $35.2 million.
Ferrellgas remains focused on executing its strategies and is confident of a potential for organic as well as inorganic growth. As of Oct 31, 2009, Ferrellgas had $174.5 million outstanding under its $448.0 million credit facility, which matures on Apr 22, 2010. During the quarter, Ferrellgas completed an offering of 1.1 million common units representing limited partner interests. The $20.0 million proceeds of the offering were used to reduce borrowings under its credit facility.
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