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SemGroup's (SEMG) Q3 Earnings Lag Estimates, Sales Beat
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SemGroup Corporation recently reported third-quarter 2018 adjusted profit of 5 cents per share, missing the Zacks Consensus Estimate of 12 cents. Moreover, the company’s bottom line deteriorated from the year-ago adjusted income of 60 cents per share. The third-quarter earnings were affected by lower profit level from the Crude Facilities, coupled with widened loss from the Crude Supply and Logistics segment.
Total revenues recorded in the quarter came in at $634 million, surpassing the Zacks Consensus Estimate of $559 million. Further, sales were higher than the prior-year figure of $545.9 million. Higher volumes and rising commodity prices supported the top-line growth.
SemGroup Corporation Price, Consensus and EPS Surprise
Crude Transportation: This segment recorded a profit of $38.1 million, reflecting an increase from the year-ago quarter’s $34.6 million, primarily due to a fall in operating costs. Consolidated pipeline volumes decreased to 182 thousand barrels per day (Mbbl/d) from 190 Mbbl/d in the year-ago period. White Cliffs pipeline volumes of 112 Mbbl/d were higher than the year-ago figure of 105 Mbbl/d.
Crude Facilities: Profit generated from this segment amounted to $8.2 million, marginally lower than the year-ago level of $8.8 million, because of the timing of take-or-pay recognition. Cushing terminal utilization came in at 94%, flat year over year.
Crude Supply and Logistics: The segment’s loss in the quarter under review widened to $7 million, from $1.7 million incurred in the corresponding quarter of the last year, owing to inventory cost timing.
HFOTCO: This unit (acquired last year) generated a profit of around $36.2 million in the third quarter, much higher than the year-ago level of $28.5 million, backed by contributions from new assets. Average terminal utilization, however, fell to 96% from 98% in the year-ago quarter.
SemGas: During the third quarter, the SemGas segment earned $19.8 million, up from $15.6 million in the year-ago quarter. The increase can be attributed to higher average processing volumes and rising commodity prices.
SemCAMS: Profit generated from this unit recorded a year-over-year increase from $16.7 million in the year-ago quarter to $20.5 million in the quarter under review. The uptick reflects a year-over-year improvement in total average throughput volumes.
Balance Sheet
As of Sep 30, 2018, the company had cash and cash equivalents of $70 million, and a long-term debt of around $2.6 billion. Its debt-to-capitalization ratio was 62.7%.
2018 Guidance
SemGroup increased its full-year 2018 capital expenditure guidance to $360 million, which incorporates the investments on the new Pipestone Pipeline project, located in Canada. Canada is expected to witness capital spending of $203 million. In contrast, Mid-Continent and Gulf Coast are expected to receive $50 million and $67 million. The year-to-date results allowed the company to narrow its adjusted EBITDA guidance to the band of $385-$400 million.
Zacks Rank & Key Picks
Currently, Tulsa, OK-based SemGroup has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:
Fort Worth, TX-based Range Resources Corporation (RRC - Free Report) holds a Zacks Rank #2 (Buy). The company’s earnings for 2018 are expected to surge more than 100% year over year.
El Dorado, AR-based Murphy Oil Corporation (MUR - Free Report) carries a Zacks Rank #2. The company’s sales for 2018 are expected to grow more than 20% from 2017.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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SemGroup's (SEMG) Q3 Earnings Lag Estimates, Sales Beat
SemGroup Corporation recently reported third-quarter 2018 adjusted profit of 5 cents per share, missing the Zacks Consensus Estimate of 12 cents. Moreover, the company’s bottom line deteriorated from the year-ago adjusted income of 60 cents per share. The third-quarter earnings were affected by lower profit level from the Crude Facilities, coupled with widened loss from the Crude Supply and Logistics segment.
Total revenues recorded in the quarter came in at $634 million, surpassing the Zacks Consensus Estimate of $559 million. Further, sales were higher than the prior-year figure of $545.9 million. Higher volumes and rising commodity prices supported the top-line growth.
SemGroup Corporation Price, Consensus and EPS Surprise
SemGroup Corporation Price, Consensus and EPS Surprise | SemGroup Corporation Quote
Segmental Information
Crude Transportation: This segment recorded a profit of $38.1 million, reflecting an increase from the year-ago quarter’s $34.6 million, primarily due to a fall in operating costs. Consolidated pipeline volumes decreased to 182 thousand barrels per day (Mbbl/d) from 190 Mbbl/d in the year-ago period. White Cliffs pipeline volumes of 112 Mbbl/d were higher than the year-ago figure of 105 Mbbl/d.
Crude Facilities: Profit generated from this segment amounted to $8.2 million, marginally lower than the year-ago level of $8.8 million, because of the timing of take-or-pay recognition. Cushing terminal utilization came in at 94%, flat year over year.
Crude Supply and Logistics: The segment’s loss in the quarter under review widened to $7 million, from $1.7 million incurred in the corresponding quarter of the last year, owing to inventory cost timing.
HFOTCO: This unit (acquired last year) generated a profit of around $36.2 million in the third quarter, much higher than the year-ago level of $28.5 million, backed by contributions from new assets. Average terminal utilization, however, fell to 96% from 98% in the year-ago quarter.
SemGas: During the third quarter, the SemGas segment earned $19.8 million, up from $15.6 million in the year-ago quarter. The increase can be attributed to higher average processing volumes and rising commodity prices.
SemCAMS: Profit generated from this unit recorded a year-over-year increase from $16.7 million in the year-ago quarter to $20.5 million in the quarter under review. The uptick reflects a year-over-year improvement in total average throughput volumes.
Balance Sheet
As of Sep 30, 2018, the company had cash and cash equivalents of $70 million, and a long-term debt of around $2.6 billion. Its debt-to-capitalization ratio was 62.7%.
2018 Guidance
SemGroup increased its full-year 2018 capital expenditure guidance to $360 million, which incorporates the investments on the new Pipestone Pipeline project, located in Canada. Canada is expected to witness capital spending of $203 million. In contrast, Mid-Continent and Gulf Coast are expected to receive $50 million and $67 million. The year-to-date results allowed the company to narrow its adjusted EBITDA guidance to the band of $385-$400 million.
Zacks Rank & Key Picks
Currently, Tulsa, OK-based SemGroup has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks given below:
New York, NY-based Hess Corporation (HES - Free Report) has a Zacks Rank #1 (Strong Buy). Its earnings for 2018 are expected to surge around 100% from the 2017 level. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fort Worth, TX-based Range Resources Corporation (RRC - Free Report) holds a Zacks Rank #2 (Buy). The company’s earnings for 2018 are expected to surge more than 100% year over year.
El Dorado, AR-based Murphy Oil Corporation (MUR - Free Report) carries a Zacks Rank #2. The company’s sales for 2018 are expected to grow more than 20% from 2017.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>