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Atmos Energy Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 5, 2010 12:19PM
Atmos Energy Corp. (ATO) filed Quarterly Report for the period ended 2010-06-30. Atmos Energy Corp. has a market cap of $2.75 billion; its shares were traded at around $29.53 with a P/E ratio of 14.6 and P/S ratio of 0.5. The dividend yield of Atmos Energy Corp. stocks is 4.6%. Atmos Energy Corp. had an annual average earning growth of 5.8% over the past 10 years. GuruFocus rated Atmos Energy Corp. the business predictability rank of 3-star.ATO is in the portfolios of Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
Due to the seasonality of our distribution business, we typically incur a net loss in our fiscal third quarter. For the three months ended June 30, 2010, we reported a net loss of $3.2 million, or $0.03 per diluted share compared with net income of $2.0 million, or $0.02 per diluted share in the prior-year quarter. The net loss for the three months ended June 30, 2010 includes noncash, unrealized net losses of $11.1 million, or $0.12 per diluted share compared with net gains of $7.0 million, or $0.08 per diluted share for the three months ended June 30, 2009. Quarter over quarter, lower net losses in our natural gas distribution operations offset lower earnings in our regulated transmission and storage segment associated with a 29 percent decrease in consolidated throughput due to reduced demand and basis spreads. Our nonregulated operations benefited from significantly higher storage and trading margins compared with the prior-year quarter, which more than offset the impact of an 11 percent quarter-over-quarter decrease in sales volumes in our natural gas marketing segment.
We reported net income of $204.3 million, or $2.18 per diluted share for the nine months ended June 30, 2010 compared with net income of $206.9 million, or $2.25 per diluted share in the prior-year period. Unrealized losses in our nonregulated operations during the current period reduced net income by $6.2 million or $0.07 per diluted share compared with net losses recorded in the prior-year period of $9.9 million, or $0.11 per diluted share. Regulated operations contributed 84 percent of our net income during this period with our nonregulated operations contributing the remaining 16 percent. Net income in both periods was impacted by nonrecurring items. The current year period includes the positive impact of a state sales tax refund of $4.5 million, or $0.05 per diluted share. Net income in the prior-year period included the net positive impact of several one-time items totaling $17.3 million, or $0.19 per diluted share related to the following pre-tax amounts:
During the year, we continued to successfully access the capital markets and received updated debt ratings from three rating agencies. In October 2009, we renewed a $200 million 364-day committed credit facility and in December 2009 we renewed a $450 million 364-day committed credit facility for our nonregulated operations. In June 2010, Fitch upgraded our rating outlook from stable to positive and affirmed the existing credit rating on our senior unsecured debt and commercial paper. In March 2010, Moodys upgraded our rating outlook from stable to positive and affirmed the existing credit rating on our senior long-term debt and commercial paper while S&P affirmed our rating outlook as stable and our senior long-term debt credit rating. The new credit facilities should help ensure we have sufficient liquidity to fund our working capital needs, while our credit ratings should help us continue to obtain financing at a reasonable cost in the future.
On July 1, 2010, we entered into an accelerated share repurchase program with Goldman Sachs & Co. as part of our ongoing efforts to improve shareholder value. The shares that will be repurchased under this program will offset the dilutive impact of stock grants made under our various employee and director incentive compensation plans. It is anticipated that the impact of the program will add $0.01 to $0.02 to fiscal 2010 diluted earnings per share.
Stocks Discussed: ATO,