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MPLX Beats Q2 Earnings Estimates on Higher Pipeline Tariff

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MPLX LP (MPLX - Free Report) reported second-quarter adjusted earnings of 58 cents per unit, beating the Zacks Consensus Estimate of 48 cents. The bottom line also improved from the year-ago profit of 55 cents per share.

Revenues of $2,081 million increased from second-quarter 2019 sales of $1,629 million. Also, the top line beat the Zacks Consensus Estimate of $1,954 million.

Earnings were backed by average tariff rates from product and crude oil pipelines. Contributions from gathering and processing business also aided the outperformance.

MPLX LP Price, Consensus and EPS Surprise

 

MPLX LP Price, Consensus and EPS Surprise

MPLX LP price-consensus-eps-surprise-chart | MPLX LP Quote

Segmental Highlights

MPLX’s adjusted EBITDA from the Logistics and Storage segment increased from $570 million a year ago to $839 million. The year-over-year upside is attributable to higher average tariff rates from product and crude oil pipelines, partially offset by lower terminal throughput.

Adjusted EBITDA from the Gathering and Processing segment was recorded at $388 million, up from $350 million in the prior-year quarter. The outperformance was driven by higher C2 and NGLs fractionated volumes, partially negated by lower gathering throughput.

Costs and Expenses

Total costs and expenses in the quarter were recorded at $1,203 million, down from the year-ago level of $1,325 million. Also, expenses related to operations declined to $435 million from $548 million.

Cash Flow

Distributable cash flow available to limited partners in second-quarter 2020 was $1,027 million, providing 1.39X distribution coverage, up from $1,007 million in the year-ago quarter. Distribution per unit was 68.75 cents in the reported quarter, representing an increase of 3% from the year-ago quarter.

Net cash flow from operating activities in the quarter under review increased to $1,105 million from $1,101 million recorded in the corresponding period of 2019.

Balance Sheet

As of Jun 30, 2020, the partnership’s cash and cash equivalents were $67 million. Its total long-term debt amounted to $20.6 billion, while debt-to-capitalization ratio was 0.61.

Outlook

The partnership is on track to lower capital budget for 2020 by more than $700 million. It also plans to reduce 2020 operating expenses by roughly $200 million. MPLX continues to expect positive free cashflows in 2021 after capital expenditure and distribution payments. 

Zacks Rank & Stocks to Consider

The partnership currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Concho Resources Inc. (CXO - Free Report) , Noble Energy Inc. (NBL - Free Report) and EOG Resources, Inc. (EOG - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Concho is likely to see earnings growth of 21.6% in 2020.

Noble Energy has witnessed upward estimate revisions for its 2020 bottom line in the past 30 days. 

EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.

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