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Why Is USA Compression (USAC) Up 8.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for USA Compression Partners (USAC - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is USA Compression 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 catalysts.
USA Compression Posts Reports Q2 Profit
USA Compression Partners, LP reported second-quarter 2023 net profit of 11 cents per common unit, turning around from the year-ago quarter’s reported loss of 3 cents. The partnership reported a net income of $23.6 million in the reported quarter compared with $9.1 million in the year-ago period. This was due to improved pricing and utilization.
Revenues of $206.9 million were up 20.7% from the year-ago quarter’s level. The top line beat the Zacks Consensus Estimate of $199 million.
Adjusted EBITDA increased 18.6% to $125 million. The figure, however, missed our estimate of $126.3 million. Distributable cash flow rose from $55.6 million in the prior-year quarter to $67 million.
The partnership reported operating cash flow of $87.9 million in the second quarter, down from the prior-year quarter’s reported number of $94.2 million. The gross operating margin of 66.2% marked a decrease from the year-ago period’s 67.8%.
USAC’s revenue-generating capacity increased 9.3% to 3,309.6 horsepower year over year. The figure also beat our estimate of 3,205.1 horsepower. Further, the average monthly revenue per horsepower rose to $18.65 from $17.20 in the second quarter of 2023.
Meanwhile, USA Compression’s average quarterly horsepower utilization rate came in at 93.4%, up from 87.9% in the year-ago period.
DCF, Cost, Capex & Balance Sheet
USAC’s Discounted cash flow (DCF) available to limited partners for the second quarter totaled $67 million (providing 1.30x distribution coverage), up 20.6% from the year-ago quarter’s level.
Notably, on Jul 14, the partnership announced second-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis). The distribution was paid out on Aug 4, 2023, to common unitholders of record as of Jul 24, 2023.
It reported $155.5 million in costs and expenses, up 30.4% from the year-ago quarter’s recorded figure of $129.1 million.
It spent $71.6 million on growth capex. Maintenance capex amounted to $6.4 million.
As of Jun 30, 2023, USA Compression had net long-term debt of about $2.2 billion.
Guidance
For 2023, USAC anticipates distributable cash flow in the $260-$280 million range. The partnership also expects adjusted EBITDA in the band of $490-510 million.
The company anticipates 2023 net income in the $75-$95 million range.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -5% due to these changes.
VGM Scores
At this time, USA Compression has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 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
USA Compression has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is USA Compression (USAC) Up 8.4% Since Last Earnings Report?
A month has gone by since the last earnings report for USA Compression Partners (USAC - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is USA Compression 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 catalysts.
USA Compression Posts Reports Q2 Profit
USA Compression Partners, LP reported second-quarter 2023 net profit of 11 cents per common unit, turning around from the year-ago quarter’s reported loss of 3 cents. The partnership reported a net income of $23.6 million in the reported quarter compared with $9.1 million in the year-ago period. This was due to improved pricing and utilization.
Revenues of $206.9 million were up 20.7% from the year-ago quarter’s level. The top line beat the Zacks Consensus Estimate of $199 million.
Adjusted EBITDA increased 18.6% to $125 million. The figure, however, missed our estimate of $126.3 million. Distributable cash flow rose from $55.6 million in the prior-year quarter to $67 million.
The partnership reported operating cash flow of $87.9 million in the second quarter, down from the prior-year quarter’s reported number of $94.2 million. The gross operating margin of 66.2% marked a decrease from the year-ago period’s 67.8%.
USAC’s revenue-generating capacity increased 9.3% to 3,309.6 horsepower year over year. The figure also beat our estimate of 3,205.1 horsepower. Further, the average monthly revenue per horsepower rose to $18.65 from $17.20 in the second quarter of 2023.
Meanwhile, USA Compression’s average quarterly horsepower utilization rate came in at 93.4%, up from 87.9% in the year-ago period.
DCF, Cost, Capex & Balance Sheet
USAC’s Discounted cash flow (DCF) available to limited partners for the second quarter totaled $67 million (providing 1.30x distribution coverage), up 20.6% from the year-ago quarter’s level.
Notably, on Jul 14, the partnership announced second-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis). The distribution was paid out on Aug 4, 2023, to common unitholders of record as of Jul 24, 2023.
It reported $155.5 million in costs and expenses, up 30.4% from the year-ago quarter’s recorded figure of $129.1 million.
It spent $71.6 million on growth capex. Maintenance capex amounted to $6.4 million.
As of Jun 30, 2023, USA Compression had net long-term debt of about $2.2 billion.
Guidance
For 2023, USAC anticipates distributable cash flow in the $260-$280 million range. The partnership also expects adjusted EBITDA in the band of $490-510 million.
The company anticipates 2023 net income in the $75-$95 million range.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -5% due to these changes.
VGM Scores
At this time, USA Compression has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 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
USA Compression has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.