UGI Corp. (NYSE: UGI) reported Q4 EPS of $0.05, $0.35 better than the analyst estimate of ($0.30). Revenue for the quarter came in at $1.12 billion versus the consensus estimate of $1.22 billion.

HEADLINES

• GAAP net income of $532 million and adjusted net income of $561 million compared to GAAP net income of $256 million and adjusted net income of $413 million in the prior year.
• GAAP EPS of $2.54 per diluted share and adjusted EPS of $2.67 per diluted share compared to GAAP EPS of $1.41 per diluted share and adjusted EPS of $2.28 per diluted share in the prior year.
• Reportable segments earnings before interest expense and income tax1 ("EBIT") of $1,029 million compared to $978 million in the prior year.
• Strong fourth quarter performance relative to updated guidance provided on August 3, 2020, driven by better than anticipated business results, a slightly lower than anticipated COVID-19 impact, and higher than expected tax benefits.
• AmeriGas increased total investment in the LPG business transformation project to $200 million and now expects to realize $140 million in permanent annual benefits by the end of Fiscal 2022.
• Announced transformation project for UGI's corporate support functions for Finance, Procurement, HR, and IT. Expected investment cost of $40 million over the next 2-3 years and expect ongoing savings of $15 million.
• Issued adjusted EPS guidance range of $2.65 - $2.952 per diluted share for the fiscal year ending September 30, 2021. The midpoint of the Fiscal 2021 guidance range is approximately 12% higher than UGI’s Fiscal 2020 adjusted earnings per share of $2.67 excluding $0.17 of tax benefits specific to Fiscal 2020.

"We are pleased to report very strong Fiscal 2020 results despite the challenges that both warm weather and the COVID-19 pandemic placed on our operations," said John L. Walsh, President and Chief Executive Officer of UGI Corporation. "UGI delivered adjusted earnings per share of $2.67, continued to demonstrate the resiliency of our business, and made progress on our key growth, environmental, and social initiatives. Our earnings include approximately $0.17 of tax benefits that were specific to Fiscal 2020. Looking ahead to Fiscal 2021, the midpoint of our guidance range is $2.80 per share, approximately 12% higher than our Fiscal 2020 adjusted EPS, excluding the Fiscal 2020 tax benefits, of $2.50 per share.

“Utilities deployed near-record levels of capital and met pipeline replacement goals despite nearly two months of inactivity due to COVID-19. We expect to deploy approximately $430 million of capital in Fiscal 2021, a new record. Also, we settled a rate case in October that will increase our base rates by $20 million. At Energy Services, our strategy to build out our natural gas asset network continued to benefit the business as UGI Appalachia delivered solid results. Earlier this month, we completed construction of the Bethlehem LNG facility, on time and on budget, which will add approximately 70,000 dekatherms per day to our peaking portfolio. In July, we completed the acquisition of GHI, a renewable natural gas business, that strengthens our platform to deliver renewable energy solutions. Earlier this week, we took another important step in this process by entering into a definitive agreement to make a small investment in a utility-scale RNG project in Idaho. We anticipate investing in more projects like this in the coming years.

“At our Global LPG businesses, we delivered on the first phase of our LPG business transformation initiatives by realizing over $30 million and €5 million of benefits at AmeriGas and UGI International, respectively, in Fiscal 2020. We are making key investments to improve operational efficiency and create an even better customer experience that will result in increased overall cash flow from our LPG businesses for Fiscal 2021 and beyond. Lastly, our UGI International team did an outstanding job managing expenses and margins to offset the impact of both warm weather and COVID-19.

"In Fiscal 2020, UGI also initiated a transformation project to review and improve processes at its support functions, including Finance, Procurement, HR, and IT. This project will provide us an opportunity to standardize activities, incorporate best practices, and increase efficiency across our business.

“Turning to our environmental and social commitments, earlier this year we announced methane and greenhouse gas emissions reduction targets for the Utilities business. These targets are in line with our commitment to grow our business responsibly, and we look forward to updating you on our progress. In alignment with UGI’s commitment to promote diversity, I am proud of our recently launched BIDE Initiative. As part of this initiative, UGI established new partnerships with the Urban Affairs Coalition and Big Brothers Big Sisters, further demonstrating UGI’s commitment to the communities it serves.

"Fiscal 2020 was a challenging year for both our customers and the communities we serve, but UGI continued to deliver on its commitments to stakeholders. We continue to strengthen our core operations and identify areas where we can push the boundaries and grow our business both organically and inorganically. As we enter Fiscal 2021, we are confident that we can build on the momentum from late in the year and deliver on our Fiscal 2021 guidance. As we enter the winter heating months and COVID-19 cases are increasing again, we want to reiterate that the safety and well-being of our employees, customers, and the communities we serve remain our top priority," Mr. Walsh concluded.

GUIDANCE:

UGI Corp. sees FY2021 EPS of $2.65-$2.95, versus the consensus of $2.83.

UGI provides an adjusted EPS guidance range of $2.65 - $2.952 per diluted share for the fiscal year ending September 30, 2021. This guidance range assumes normal weather, based upon a rolling 10-year average, includes a negative first quarter impact of approximately $0.10 per diluted share from the COVID-19 pandemic, excludes business transformation expenses related to the Global LPG businesses and the corporate support functions, and mark-to-market gains and losses on commodity and certain foreign currency derivative instruments.

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