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Atmos Energy (NYSE:ATO) Q4 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Atmos Energy Corporation (NYSE:ATO) is scheduled to report Q4 earnings results on November 11, 2020.

The company is expected to report earnings of $0.51/share on revenue of $623 million. The consensus earnings per share (EPS) of $0.51/share is based on a poll of 10 analysts and represents a growth in eps of 4.5% over the same quarter last year, when the company reported earnings of $0.49/share.

The revenue forecast of $623 million based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 40.4%. Last year the company reported $443.7 million in revenue for the quarter.

Expected to report EPS growth of 4.5% for Q4, 2020
Metric Expected Prior Year YoY Change
Revenue $622.98 $443.68 40.4%
EPS $0.51 $0.49 4.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and met expectations 2 quarters.

What are your expectations from Atmos Energy Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2020 $0.77 $0.79 3.0% Beat
Q2, 2020 $1.92 $1.95 1.4% Beat
Q1, 2020 $1.46 $1.47 0.4% Beat
Q4, 2019 $0.49 $0.49 0% Met
Q3, 2019 $0.68 $0.68 0% Met
Q2, 2019 $1.71 $1.82 6.7% Beat
Q1, 2019 $1.30 $1.38 6.4% Beat
Q4, 2018 $0.36 $0.41 15.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $104.81 $104.70 −0.1% Decline
May 6, 2020 $101.77 $96.38 −5.3% Decline
February 4, 2020 $118.67 $118.28 −0.3% Decline
November 6, 2019 $107.92 $108.18 0.2% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.53, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.53 implies a 0.6% chance of earnings manipulation.

Fundamentals And Technical Analysis

Atmos Energy Corporation is currently trading at $97.90/share, up 4.5% for the day. The company is trading at approximately 80.7% of its 52-week high of $121.08/share. The company’s stock price is down −6.5% since the last earnings report and up 2.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.33 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ATO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 20.32 and a forward P/E multiple of 19.99.

Atmos Energy Corporation’s current share price also implies a price-to-book (P/B) multiple of 1.87. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q3
Period End Date June 30, 2020
Stock Price (Current) $97.90
P/E Ratio 20.3x
P/E Ratio (Fwd) 20.0x
PEG Ratio 1.4
Total Debt / Total Capital 29.3%
Levered Free Cash Flow -$844.6 million
EV / EBITDA 13.5x

Finbox

Atmos Energy Corporation is a large-cap stock with a market capitalization of $11.551 billion and a total enterprise value of $16.119 billion. The company operates in the Utilities sector and the Gas Utilities industry.

Atmos Energy Corporation, together with its subsidiaries, engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States. It operates through Distribution, and Pipeline and Storage segments. The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately three million residential, commercial, public authority, and industrial customers. As of September 30, 2019, it owned 70,875 miles of underground distribution and transmission mains. The Pipeline and Storage segment engages in the pipeline and storage operations. This segment transports natural gas for third parties and manages five underground storage reservoirs in Texas; and provides ancillary services to the pipeline industry, including parking arrangements, lending, and inventory sales. It owns 5,669 miles of gas transmission lines. The company was founded in 1906 and is headquartered in Dallas, Texas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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