It has been about a month since the last earnings report for Enbridge (ENB Quick QuoteENB - Free Report) . Shares have added about 17.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Enbridge due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Enbridge Q3 Earnings Miss Estimates

Enbridge reported third-quarter 2020 earnings per share of 36 cents, missing the Zacks Consensus Estimate of 40 cents. The bottom line also deteriorated from 42 cents a year ago.

Total revenues in the quarter declined 22.2% year over year to $6,838 million.

The weak quarterly results were owing to a decrease in Mainline System throughput, partially offset by higher contributions from the U.S. Gas Transmission business.

Environmental Target

The leading midstream energy infrastructure player in North America separately announced its target of accomplishing net zero greenhouse gas emission by 2050. The company added its interim goal to slash the intensity of greenhouse gas emissions by 2030.

Distributable Cash Flow (DCF)

In third-quarter 2020, the company reported DCF of C$2,088 million, representing a decline from C$2,105million a year ago.

Segment Analysis

Enbridge conducts business through five segments — Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.

Liquids Pipelines: The segment’s adjusted earnings before interest, income taxes, and depreciation and amortization (EBITDA) amounted to C$1,732 million, down from C$1,826 million in the year-earlier quarter. Lower contributions from Gulf Coast and Mid-Continent System, Mainline System and Regional Oil Sands System primarily led to the underperformance.

Gas Transmission and Midstream: The segment’s adjusted earnings totaled C$945 million, up marginally from C$944 million in third-quarter 2019. Higher contributions from the US Gas Transmission business drove the upside.

Gas Distribution and Storage: The unit generated profit of C$315 million compared with C$255 million in the prior-year quarter. Increase in distribution charges and growth in customer portfolio primarily led to the outperformance.

Renewable Power Generation: The segment recorded earnings of C$93 million, up from C$82 million in the prior-year quarter, thanks to Hohe See offshore wind project’s contributions.

Energy Services: The segment incurred a loss of C$110 million against a profit of C$27 million in third-quarter 2019.

Balance Sheet

At the end of third-quarter 2020, the company reported total debt of C$67,132 million, and cash and cash equivalents of C$657 million. Its debt-to-capitalization ratio was almost 0.51.

Guidance

For 2020, the company has reaffirmed its guidance for DCF per share at the band of C$4.50 to C$4.80. Enbridge is optimistic that there will be a gradual recovery in energy demand through the remainder of this year and the entire 2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, Enbridge has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Enbridge has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.