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Why Is TC Energy (TRP) Down 9.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for TC Energy (TRP - Free Report) . Shares have lost about 9.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TC Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
TC Energy's Q3 Earnings, Sales Beat
TC Energy reported third-quarter adjusted earnings of 82 cents per share, marginally outperforming the Zacks Consensus Estimate of 75 cents. This outperformance could be attributed to strong segmental results like that of the Canadian Natural Gas Pipelines, Mexico Natural Gas Pipelines, Power and Storage, and the U.S. Natural Gas Pipelines unit, partially offset by a weak Liquids Pipelines unit.
TC Energy’s comparable EBITDA of C$2.46 billion in the reported quarter was up from C$2.24 billion in the prior-year period.
This North America-based energy infrastructure provider’s quarterly revenues of $2.91 billion increased approximately 13.2% year over year, beating the Zacks Consensus Estimate of $2.69 billion on solid segmental performances.
TC Energy’s board of directors announced a quarterly dividend of 90 Canadian cents per common share for the quarter ending Dec 31, 2022. The dividend is payable Jan 31, 2023, to its shareholders of record at the close of the business on Dec 30, 2022.
Segmental Information
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$713 million, up about 13% from the year-ago quarter’s levels. This increase was primarily due to the impact of higher flow-through costs on TRP’s Canadian rate-regulated pipelines and increased rate-base earnings on the NGTL System.
U.S. Natural Gas Pipelines comparable EBITDA of C$926 million reflects a 4% increase from the prior-year quarter’s level. This upside can be attributed to a stronger U.S. dollar in 2022 with an otherwise consistent EBITDA in the third quarter of 2022 compared with the same-period level in 2021.
Mexico Natural Gas Pipelines comparable EBITDA of C$204 million was up 19.3% from the year-earlier quarter’s figure of C$171 million. This upside could primarily be related to the north section of the Villa de Reyes pipeline (VdR North) and the east section of the Tula pipeline (Tula East), both placed into commercial service in the September quarter of 2022.
Liquids Pipelines unit’s comparable EBITDA of C$332 million in the reported quarter deteriorated from the year-earlier quarter’s level of C$387 million. This downtrend was due to lower rates and volumes on contracted volumes in the U.S. Gulf Coast section of the Keystone Pipeline System as well as lower contributions from liquids marketing activities due to soft margins.
Power and Storage posted a comparable EBITDA of C$295 million, up by 77.7% from the year-earlier quarter’s figure of C$166 million. The uptrend is primarily attributable to higher contributions from Bruce Power owing to a rise in the contract price and greater plant output. This resulted from fewer planned outage days and an increased EBITDA from Canadian Power concerning higher realized power prices and marketing activities.
Expenditure and Balance Sheet
As of Sep 30, 2022, TC Energy’s capital investments for the reported quarter summed C$2.6 billion.
TRP had cash and cash equivalents worth C$2.16 billion and long-term debt of C$40.92 billion, representing a debt-to-capitalization of 53.3%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, TC Energy has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
TC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is TC Energy (TRP) Down 9.9% Since Last Earnings Report?
It has been about a month since the last earnings report for TC Energy (TRP - Free Report) . Shares have lost about 9.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TC Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
TC Energy's Q3 Earnings, Sales Beat
TC Energy reported third-quarter adjusted earnings of 82 cents per share, marginally outperforming the Zacks Consensus Estimate of 75 cents. This outperformance could be attributed to strong segmental results like that of the Canadian Natural Gas Pipelines, Mexico Natural Gas Pipelines, Power and Storage, and the U.S. Natural Gas Pipelines unit, partially offset by a weak Liquids Pipelines unit.
TC Energy’s comparable EBITDA of C$2.46 billion in the reported quarter was up from C$2.24 billion in the prior-year period.
This North America-based energy infrastructure provider’s quarterly revenues of $2.91 billion increased approximately 13.2% year over year, beating the Zacks Consensus Estimate of $2.69 billion on solid segmental performances.
TC Energy’s board of directors announced a quarterly dividend of 90 Canadian cents per common share for the quarter ending Dec 31, 2022. The dividend is payable Jan 31, 2023, to its shareholders of record at the close of the business on Dec 30, 2022.
Segmental Information
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$713 million, up about 13% from the year-ago quarter’s levels. This increase was primarily due to the impact of higher flow-through costs on TRP’s Canadian rate-regulated pipelines and increased rate-base earnings on the NGTL System.
U.S. Natural Gas Pipelines comparable EBITDA of C$926 million reflects a 4% increase from the prior-year quarter’s level. This upside can be attributed to a stronger U.S. dollar in 2022 with an otherwise consistent EBITDA in the third quarter of 2022 compared with the same-period level in 2021.
Mexico Natural Gas Pipelines comparable EBITDA of C$204 million was up 19.3% from the year-earlier quarter’s figure of C$171 million. This upside could primarily be related to the north section of the Villa de Reyes pipeline (VdR North) and the east section of the Tula pipeline (Tula East), both placed into commercial service in the September quarter of 2022.
Liquids Pipelines unit’s comparable EBITDA of C$332 million in the reported quarter deteriorated from the year-earlier quarter’s level of C$387 million. This downtrend was due to lower rates and volumes on contracted volumes in the U.S. Gulf Coast section of the Keystone Pipeline System as well as lower contributions from liquids marketing activities due to soft margins.
Power and Storage posted a comparable EBITDA of C$295 million, up by 77.7% from the year-earlier quarter’s figure of C$166 million. The uptrend is primarily attributable to higher contributions from Bruce Power owing to a rise in the contract price and greater plant output. This resulted from fewer planned outage days and an increased EBITDA from Canadian Power concerning higher realized power prices and marketing activities.
Expenditure and Balance Sheet
As of Sep 30, 2022, TC Energy’s capital investments for the reported quarter summed C$2.6 billion.
TRP had cash and cash equivalents worth C$2.16 billion and long-term debt of C$40.92 billion, representing a debt-to-capitalization of 53.3%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, TC Energy has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
TC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.