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Did Ferrellgas Partners’ Fiscal 2Q17 Results Restore Optimism?

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Did Ferrellgas Partners’ Fiscal 2Q17 Results Restore Optimism? PART 1 OF 3

Ferrellgas Partners’ Propane Sales Volumes Rose 7% in Fiscal 2Q17

Fiscal 2Q17 EBITDA 

Ferrellgas Partners (FGP) reported results for the quarter ending January 31, 2017, on March 9, 2017. The company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) fell to $105 million compared to $138.3 million in the corresponding quarter last year. Propane gallons sold, however, rose 7% compared to the corresponding quarter last year.

Ferrellgas Partners’ Propane Sales Volumes Rose 7% in Fiscal 2Q17

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The above graph shows Ferrellgas Partners’ adjusted EBITDA over the last three years. The year-over-year decrease in FGP’s 2Q17 EBITDA was mainly due to decreased contributions from its midstream crude oil logistics segment, reflecting the loss of Bridger’s largest customer in September 2016.

“Weather for the second fiscal quarter was 4% colder than last year but a stunning 14% warmer than normal,” said James Ferrell, the company’s interim president and chief executive officer.

Focus on market share

According to Ferrellgas, the company’s efforts to increase market share resulted in increased propane sales for the quarter. However, margins fell compared to the corresponding period last year.

“Our efforts to increase market share resulted in gallons increasing approximately 7%, but resulted in overall margins lower than the prior year period, due to customer mix and location,” said Ferrell.

Distributions

Ferrellgas Partners paid a distribution of $0.10 per unit for fiscal 2Q17, unchanged from the previous quarter. In November 2016, FGP had slashed its distribution for fiscal 1Q17 by 80% from $0.51 to $0.10 per unit.

Suburban Propane Partners (SPH) reported a 25% year-over-year growth in its EBITDA for the quarter ending December 24, 2016.

Let’s next take a look at FGP’s stock performance in 2017.

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