It has been about a month since the last earnings report for Magellan Midstream Partners . Shares have lost about 10% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Magellan Midstream due for a breakout? 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 catalysts.
Magellan Midstream Q3 Earnings Beat, Revenues Miss Estimates
Magellan Midstream reported third-quarter 2021 adjusted earnings per unit of $1.09, beating the Zacks Consensus Estimate of 96 cents and improving 12.4% from the year-ago bottom line of 97 cents. The outperformance is attributable to a solid revenue contribution from its refined products unit.
However, quarterly revenues of $639 million lagged the Zacks Consensus Estimate of $648 million due to weak revenue contribution from the crude oil unit. The top line rose 6.9% from the year-ago sales of $598 million.
Segmental Performance
Refined Products: Revenues of $504.4 million were up from the year-ago period’s $414.8 million. Total volumes shipped in the quarter under review were 119.2 million barrels, comparing unfavorably with 141.8 million barrels a year ago. The operating margin from the segment increased to $272.5 million in the third quarter from $228.2 million in the corresponding period of 2020.
Crude Oil: Quarterly revenues grossed $136.1 million, down 16.8% year over year on lower storage revenues and softness in average tariff rates. Total volumes shipped in the quarter were 49.2 million barrels, up from 45.1 million barrels a year ago. Operating margin contracted to $111.6 million from $135.8 million in the prior year.
DCF & Balance Sheet
Magellan Midstream’s distributable cash flow (DCF) for the third quarter summed $277 million, rising 6.9% from the year-ago level.
As of Sep 30, 2021, Magellan Midstream had cash and cash equivalents worth $12.6 million, and long-term debt of $5.1 billion.
2021 Outlook
Management raised its annual DCF outlook for 2021 to $1.1 billion from the prior guidance of $1.07 billion.
For the full year, free cash flow (FCF) is expected to be $1.29 billion or $384 million after distributions.
Based on the success of projects currently underway, Magellan Midstream plans to invest $80 million in 2021 and $20 million in 2022 to complete its current array of expansion capital projects.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 8.79% due to these changes.
VGM Scores
At this time, Magellan Midstream has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Magellan Midstream has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Magellan Midstream (MMP) Down 10% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Magellan Midstream Partners . Shares have lost about 10% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Magellan Midstream due for a breakout? 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 catalysts.
Magellan Midstream Q3 Earnings Beat, Revenues Miss Estimates
Magellan Midstream reported third-quarter 2021 adjusted earnings per unit of $1.09, beating the Zacks Consensus Estimate of 96 cents and improving 12.4% from the year-ago bottom line of 97 cents. The outperformance is attributable to a solid revenue contribution from its refined products unit.
However, quarterly revenues of $639 million lagged the Zacks Consensus Estimate of $648 million due to weak revenue contribution from the crude oil unit. The top line rose 6.9% from the year-ago sales of $598 million.
Segmental Performance
Refined Products: Revenues of $504.4 million were up from the year-ago period’s $414.8 million. Total volumes shipped in the quarter under review were 119.2 million barrels, comparing unfavorably with 141.8 million barrels a year ago. The operating margin from the segment increased to $272.5 million in the third quarter from $228.2 million in the corresponding period of 2020.
Crude Oil: Quarterly revenues grossed $136.1 million, down 16.8% year over year on lower storage revenues and softness in average tariff rates. Total volumes shipped in the quarter were 49.2 million barrels, up from 45.1 million barrels a year ago. Operating margin contracted to $111.6 million from $135.8 million in the prior year.
DCF & Balance Sheet
Magellan Midstream’s distributable cash flow (DCF) for the third quarter summed $277 million, rising 6.9% from the year-ago level.
As of Sep 30, 2021, Magellan Midstream had cash and cash equivalents worth $12.6 million, and long-term debt of $5.1 billion.
2021 Outlook
Management raised its annual DCF outlook for 2021 to $1.1 billion from the prior guidance of $1.07 billion.
For the full year, free cash flow (FCF) is expected to be $1.29 billion or $384 million after distributions.
Based on the success of projects currently underway, Magellan Midstream plans to invest $80 million in 2021 and $20 million in 2022 to complete its current array of expansion capital projects.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 8.79% due to these changes.
VGM Scores
At this time, Magellan Midstream has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Magellan Midstream has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.