Earnings Analysis of NFG
Revenue Analysis
Total and Operating Revenue: NFG’s operating revenue has shown fluctuations over the last three years, recording a gradual increase from $428.70M in June 2023 to $629.94M in March 2024. This suggests an expansion in business operations or improved sales performance.
Gross Profit: Gross profit has increased from $174.52M in June 2023 to $273.64M in March 2024. The increasing trend in gross profit alongside higher revenue indicates enhanced efficiency in managing production or service delivery costs.
Cost Management
Cost of Revenue: The cost of revenue was notably high at $470.52M in March 2023 but then adjusted to a range between $222.94M and $356.30M in subsequent quarters. Managing these costs efficiently has played a key role in improving gross margins.
Operating Expense: Operating expenses have been steady, ranging from $20.43M to $25.37M. This stability demonstrates prudent operational cost management.
Total Expenses: Total expenses have risen from $243.64M in September 2023 to $379.32M in March 2024, correlating with increased revenue and potentially larger operational scope.
Profitability Analysis
EBITDA: EBITDA shows a healthy growth from $260.06M in June 2023 to $375.63M in March 2024, reflecting strong operational performance.
Operating Income: Correspondingly, operating income increased from $125.30M in September 2023 to $250.62M in March 2024, which mirrors the improvement observed in EBITDA.
Pretax Income: The pretax income has also shown considerable improvement, moving from $97.79M in September 2023 to $221.60M in March 2024.
Net Income Metrics: Net income has exhibited significant growth, notably surging from $73.68M in September 2023 to $166.27M in March 2024, reflecting efficient tax management and operational effectiveness.
Cash Flow Indicators
Reconciled Depreciation: Reconciled depreciation expenses have increased gradually, indicating growing asset base or timely asset replacement strategies.
Interest Expense: The interest expense has been maintained around $32-35M across the period, suggesting stable finance management with respect to debt.
Taxation
Tax Rate: The tax rate has varied slightly, with a slight decrease to 24.5% in December 2023 from 26.2% in June 2023, potentially indicating more favorable fiscal terms or efficient tax planning.
Tax Provision: The company’s tax provision has risen in line with pretax profits, reflecting the adherence to tax obligations corresponding to its financial performance.
Tax Effect of Unusual Items: It has been consistently reported at $0.0, indicating no significant unusual or non-recurring items affecting the tax calculations.
Shareholder Metrics
Diluted and Basic EPS: Both diluted and basic EPS have improved significantly over the period. Diluted EPS rose from 0.8 in September 2023 to 1.8 in March 2024. This performance increase is reflected directly in shareholder value.
Average Shares: There has been little change in the average number of shares, which implies that the earnings improvement is not due to share dilution.
Net Income Available to Common Stockholders: This metric has seen a robust climb, bolstering shareholder returns.
Conclusion
NFG’s financials indicate strong growth in revenues and net income, steady cost management, and solid profitability over the last three years. The company appears well-positioned for continued growth. Shareholders might be advised to continue holding their shares, while potential investors might consider NFG as a viable investment opportunity based on its current trajectory.