Propane distributor Ferrellgas Partners, L.P. (FGP), reported Monday a decrease in third-quarter profit that came in below analysts' estimates, hurt by a 21% year-over-year drop in revenues.
For the third quarter, net earnings available to common unit-holders decreased to $32.5 million or $0.48 per unit from $34.8 million or $0.55 per unit in the previous year.
On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share in the third quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter dipped 21% to $561.1 million from $712.1 million. Three analysts were expecting the company to record revenue of $672.53 million in the third quarter.
Propane and other gas liquid sales decreased year-over-year to $461.8 million from $621.3 million, with propane sales volume sliding 5% to 239.2 million gallons from 252.1 million gallons.
Cost of propane and other gas liquids was reduced 35% to $295.9 million from $455.4 million in the same period last year.
James Ferrell, Ferrelgas' Chief Executive said, "In light of the third quarter's weather, which was four percent warmer than normal and five percent warmer than last year, our results were certainly gratifying. Moreover, temperatures in February, the most important month in the quarter, were seven percent warmer than normal and a year ago."
General and administrative expenses were reduced 22% to $8.5 million from $10.9 million, while lease expense decreased 29% to $4.3 million from $6 million and stock ownership plan compensation charge came down to $1.5 million from $3.4 million in the year-ago period.
Looking ahead to the fourth quarter, Ferrellgas' chief operating officer, Steve Wambold, said that the company expects its Blue Rhino brand to play a key role in fetching higher earnings. Blue Rhino's units rose at a double-digit clip during May and is well positioned for further growth, the company said.
FGP closed Friday's regular trading session at $17 on the NYSE.
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