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Atmos Energy Corporation Reports Earnings for Fiscal 2016 Second Quarter and Six Months; Tightens Fiscal 2016 Guidance Range

DALLAS, May 04, 2016 (BUSINESS WIRE) -- Atmos Energy Corporation ATO, +1.74% today reported consolidated results for its fiscal 2016 second quarter and six months ended March 31, 2016.

  • Fiscal 2016 second quarter consolidated net income, excluding net unrealized margins, was $143.9 million, or $1.40 per diluted share, compared with consolidated net income, excluding net unrealized margins of $138.5 million, or $1.36 per diluted share in the prior-year quarter.
  • Fiscal 2016 second quarter consolidated net income was $141.8 million, or $1.38 per diluted share, after including unrealized net losses of $2.1 million, or $0.02 per diluted share. Net income was $137.7 million, or $1.35 per diluted share in the prior-year quarter, after including unrealized net losses of $0.8 million, or $0.01 per diluted share.
  • The company's Board of Directors has declared a quarterly dividend of $0.42 per common share. The indicated annual dividend for fiscal 2016 is $1.68, which represents a 7.7 percent increase over fiscal 2015.
  • Fiscal 2016 earnings guidance was tightened to $3.25 to $3.35 per diluted share from $3.20 to $3.40 per diluted share, excluding unrealized margins.

For the six months ended March 31, 2016, consolidated net income was $244.7 million, or $2.38 per diluted share, compared with net income of $235.3 million, or $2.31 per diluted share for the same period last year. Results from nonregulated operations include noncash, unrealized net gains of $5.2 million, or $0.05 per diluted share for the six months ended March 31, 2016, compared with unrealized net gains of $4.0 million, or $0.04 per diluted share for the prior-year period. For the current six-month period, regulated operations contributed $238.3 million of net income, or $2.32 per diluted share, and nonregulated operations contributed net income of $6.3 million, or $0.06 per diluted share.

“Our performance through the second quarter of fiscal 2016 reflects the impact of investments made to our infrastructure to safely meet the energy needs of our customers,” said Kim Cocklin, chief executive officer of Atmos Energy Corporation. “With the winter heating season essentially behind us, we believe we can achieve earnings in the tightened range of $3.25 to $3.35 per diluted share. Looking forward, we are positioned to continue delivering annual earnings growth in the 6 percent to 8 percent range,” Cocklin concluded.

Results for the Quarter Ended March 31, 2016

Regulated distribution gross profit increased $2.9 million to $409.1 million for the fiscal 2016 second quarter, compared with $406.2 million in the prior-year quarter. Gross profit reflects a net $17.1 million increase in rates, primarily in the Mid-Tex, Mississippi and West Texas Divisions. This increase was partially offset by a $12.6 million decrease in revenue-related taxes and a $2.2 million decline in weather-related consumption. Weather was 25 percent warmer than the prior-year quarter, before adjusting for weather normalization mechanisms, which resulted in a 21 percent decrease in sales volumes.

Regulated pipeline gross profit increased $4.0 million to $95.7 million for the quarter ended March 31, 2016, compared with $91.7 million for the same quarter last year. This increase is primarily the result of a $7.0 million increase in revenues from the Gas Reliability Infrastructure Program (GRIP) filing approved in 2015, partially offset by decreased through-system volumes and lower storage and blending fees due to warmer weather in the current-year quarter.

Nonregulated gross profit decreased $9.8 million to $13.1 million for the fiscal 2016 second quarter, compared with $22.9 million for the prior-year quarter, as a result of a $7.8 million decrease in realized margins, combined with a $2.0 million decrease in unrealized margins. The quarter-over-quarter decrease in realized margins reflects larger losses on the settlement of financial positions during a period of falling natural gas prices.

Results for the Six Months Ended March 31, 2016

Regulated distribution gross profit increased $12.6 million to $742.6 million for the six months ended March 31, 2016, compared with $730.0 million in the prior-year period. Gross profit reflects a net $30.6 million increase in rates, primarily in the Mid-Tex, Mississippi and West Texas Divisions. This increase was partially offset by a $13.9 million decrease in revenue-related taxes and a $3.3 million decrease in consumption. Weather was 26 percent warmer than the prior-year period, before adjusting for weather normalization mechanisms, which resulted in a 21 percent decrease in sales volumes.

Regulated pipeline gross profit increased $15.1 million to $190.4 million for the six months ended March 31, 2016, compared with $175.3 million in the prior-year period. This increase primarily reflects a $17.1 million increase in revenue from the GRIP filing approved in 2015. This increase was partially offset by decreased through-system volumes and lower storage and blending fees due to warmer weather in the current-year period.

Nonregulated gross profit decreased $10.0 million to $28.9 million for the six months ended March 31, 2016, compared with $38.9 million for the...


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