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Enbridge (ENB) Beats Earnings & Revenue Estimates in Q3

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Leading energy infrastructure company Enbridge Inc. (ENB - Free Report) reported strong third-quarter 2017 results, courtesy of higher liquid delivery volumes from the Canadian Mainline and Lakehead System. Increased natural gas processing volumes, lower expenses and contributions from new projects also led to the encouraging numbers.

Earnings per share came in at 39 US cents, beating the Zacks Consensus Estimate and the year-ago comparable quarter earnings, both of which are 36 US cents.

Total revenues in the quarter rose 42% year over year to US$9,227 million. The top line also surpassed the Zacks Consensus Estimate of US$8,544 million.

Segment Analysis

Liquids Pipelines: Adjusted operating income at this segment was C$976 million, up almost 4% from C$941 million a year ago. Higher delivery of liquids from the Canadian Mainline and Lakehead System led to the improvement. Commencement of new projects also supported the numbers.  

Gas Pipelines and Processing: The segment reported earnings of C$700 million, skyrocketing from C$94 million recorded in third-quarter 2016. Significantly high volumes of processed natural gas drove the upside.

Gas Distribution: This business unit reported profit of C$81 million, up more than 161% from C$31 million recorded in the July-September 2016 quarter. Increased demand from active customers supported the improvement.

Green Power and Transmission: This segment saw earnings of C$20 million, which however, lagged C$34 million recorded in the prior-year quarter.

Energy Services: The segment reported loss of C$24 million, wider than a loss of C$15 million in third-quarter 2016.

Total Expenses

During the third quarter, the company reported total expenses of C$7,737 million, down 11% from C$8,704 million recorded in the July-to-September quarter of 2016.

Q3 Price Performance

Enbridge has rallied 5.1% during the quarter, outperforming the industry’s 2% gain.

 

 

Guidance

Management expects fourth-quarter 2017 results to gain from higher volumes of liquids and contributions from new projects. Given the stable and improving business, Enbridge continues to expect 2017 available cash flow from operations between $3.60 and $3.90 per share.

Zacks Rank & Key Picks

Enbridge currently has a Zacks Rank #4 (Sell). A few better-ranked players in the energy sector are Exxon Mobil Corporation (XOM - Free Report) , Par Pacific Holdings Inc. (PARR - Free Report) and Northern Oil and Gas, Inc. (NOG - Free Report) . Exxon Mobil and Par Pacific sport a Zacks Rank #1 (Strong Buy), while Northern Oil carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Irving, TX, Exxon Mobil is the largest publicly trading oil company. The company posted an average positive earnings surprise of 8.81% for the last four quarters.

Headquartered in Houston, TX, Par Pacific is involved in reefing and marketing activities. The firm managed to beat the Zacks Consensus Estimate for earnings in three of the last four quarters with an average positive surprise of 195.26%.

Based in Minnetonka, MN, Northern Oil is an upstream energy player. The company’s 2017 revenues are estimated to grow 44.1%.

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