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Piedmont Natural Gas’s Income Fell in Fiscal 4Q15 and Fiscal 2015

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Piedmont Natural Gas’s price movement

Piedmont Natural Gas (PNY) has a market cap of $4.5 billion. Its price movement was stable in fiscal 2015. After the company’s fiscal 4Q15 earnings report, PNY fell by 0.52% to close at $56.92 per share in yesterday’s trade. PNY’s price movements on weekly, monthly, and YTD bases are 0.32%, -1.0%, and 49.2%, respectively.

At times, the stock has broken the support of all moving day averages in 2015. Currently, PNY is trading 0.47% below its 20-day moving average, 4.5% above its 50-day moving average, and 38.2% above its 200-day moving average.

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The PowerShares High Yield Equity Dividend Achievers Portfolio (PEY) invests 2.4% of its holdings in Piedmont Natural Gas. The ETF aims to tracks a yield-weighted index of US companies that have increased their annual dividend for at least ten consecutive years. The YTD price movement of PEY is 1.7%, as of December 22, 2015.

Piedmont Natural Gas’s (PNY) competitors and their market caps are listed below:

  • Duke Energy Corporation (DUK)—$49.6 billion
  • Dominion Resources (D)—$40.5 billion
  • SCANA Corporation (SCG)—$8.8 billion
  • NiSource (NI)—$6.2 billion

Piedmont Natural Gas’s performance in fiscal 4Q15 and fiscal 2015

Piedmont Natural Gas (PNY) reported fiscal 4Q15 total revenue of $181.3 million, a fall of 2.4% when compared to total revenue of $185.8 million in fiscal 4Q14. Its net income including extraordinary items fell to -$14.1 million in fiscal 4Q15, as compared to net income including extraordinary items of -$9.0 million in fiscal 4Q14.

The company has declared a quarterly dividend of 33 cents per share on its common stock.

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Fiscal 2015 results

In fiscal 2015, PNY reported total revenue of $1,371.7 million, a fall of 6.7% YoY (year-over-year). Its cost of revenue as a percentage of total revenue fell by 11.3%, and its operating income rose by 2.8% in fiscal 2015.

Also, the company’s net income and EPS (earnings per share) fell to $137.0 million and $1.73, respectively, in fiscal 2015, as compared to its net income and EPS of $143.8 million and $1.84, respectively, in fiscal 2014. PNY reported adjusted net income and adjusted EPS of $147.9 million and $1.87, respectively, in fiscal 2015.

Meanwhile, PNY’s cash and cash equivalents rose by 42.5%, and its inventory fell by 18.9% in fiscal 2015. The company’s current ratio and debt-to-equity ratio fell to 0.40 and 1.5, respectively, in fiscal 2015, as compared to current and debt-to-equity ratios of 0.56 and 2.7, respectively, in fiscal 2014.

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Duke Energy’s acquisition of Piedmont Natural Gas

Duke Energy and Piedmont Natural Gas have unanimously approved a definitive agreement for Duke Energy to acquire Piedmont Natural Gas for ~$4.9 billion in cash. This acquisition is expected to be completed by the end of 2016. At the end of the transaction, PNY shareholders will receive $60 in cash for each share of common stock they hold. Duke Energy will assume ~$1.8 billion of Piedmont Natural Gas’s existing net debt. Duke Energy will finance this transaction with a combination of debt, between $500 million and $750 million of newly issued equity, and other cash sources.

Projection

The company has projected diluted EPS of $1.92–$2.02 before any merger-related expenses.

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