VALLEY FORGE, Pa. - The record cold weather in the last week of December 2017 and early January 2018 had significant positive impact on record first quarter 2018 results for UGI Corporation. Tax legislation in the United States and France also generated one-time benefits to earnings per share in the current quarter that further improved results.
“This was a strong start to fiscal 2018 as we experienced colder weather than the prior year in most of our service territories and realized benefits from our growth initiatives, as well as the U.S. tax reform legislation,” said John L. Walsh, president and chief executive officer of UGI Corporation. “Subsequent to the end of the quarter, our electric utility filed its first rate case in 22 years and we were pleased to receive the FERC (Federal Energy Resource Commission) certificate for the PennEast pipeline.”
Given the significance of the second fiscal quarter to full year results, UGI intends to provide an update regarding its adjusted EPS guidance upon the completion of the second fiscal quarter ending March 31, 2018. The reason for this is because the company’s original guidance did not include the impact of French and U.S. tax legislation.
The tax legislation in the two countries generated a one-time benefit to earnings per share of $1.04, on a combined basis, in the current quarter that were excluded from adjusted earnings per share.
Specifically, the U.S. Tax Cuts and Jobs Act produced a one-time benefit of $0.94 per share and a fiscal first quarter 2018 benefit of $0.12 per share. The French Finance Bill resulted in a one-time benefit of $0.10 per share and a fiscal first quarter loss of $(0.03) per share.
Total revenues for fiscal first quarter 2018 were $2.1252 billion compare to $1.6795 billion in fiscal first quarter 2017. Total operating income declined from $466.2 million in fiscal first quarter 2017 to $391.8 million in fiscal first quarter 2018. However, net income attributable to UGI Corporation increased from $230.7 million in fiscal first quarter 2017 to $365.9 million in fiscal first quarter 2018 thanks to a $104.4 million benefit from the tax law changes in France and the U.S. Diluted earnings per share were $2.07 in fiscal first quarter 2018 compared to $1.30 per share in fiscal 2017.
The key drivers of success in the AmeriGas business segment were mid-single digit increases in cylinder exchange and national accounts volumes with slightly higher bulk unit margins and weather colder than the prior year largely due to the last week of the quarter. The UGI International segment experienced weather that was 7 percent warmer than the previous year but was offset by contributions from the acquisition of DVEP as well as Total’s LPG distribution business in Italy, and Finagaz synergies. The Midstream & Marketing business segment benefited from margin growth from the Sunbury pipeline, and peaking demand and electric generation. Finally, the UGI Utilities business segment added 3,800 residential and commercial heating customers and benefited from the margin benefit of the PNG rate case and weather 6 percent colder than the prior year.
UGI Corporation (NYSE: UGI) is a distributor and marketer of energy products and services. Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania, distributes propane both domestically and internationally, manages midstream energy and electric generation assets in Pennsylvania, and engages in energy marketing primarily in the Mid-Atlantic region as well as parts of Europe. UGI, through subsidiaries, is the sole General Partner and owns 26 percent of Amerigas Partners, LP., the nation’s largest retail propane distributor.
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