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Enterprise Products (EPD) Up Nearly 2% Since Q3 Earnings
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Enterprise Products Partners L.P. (EPD - Free Report) stock increased nearly 2% since the partnership reported third-quarter results on Oct 28, wherein earnings met estimates. It has narrowed 2020 growth capital investment projections, while reducing the budget for 2021 and 2022.
It reported third-quarter 2020 adjusted earnings per limited partner unit of 48 cents, in line with the Zacks Consensus Estimate. The bottom line, moreover, improved from the year-ago quarter’s 46 cents per unit.
Revenues declined to $6,922 million from $7,964.1 million in the prior-year quarter. However, the top line beat the consensus estimate of $6,529 million.
Increased transportation volumes in Petrochemical & Refined Products Services, and higher fee-based volumes from the Permian Basin at the partnership’s gas processing plants aided the bottom line. The positives were partially offset by lower natural gas pipeline transportation volumes, and crude oil transportation and marine terminal volumes.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Gross operating income at NGL Pipelines & Services increased from $1,008.3 million in the year-ago quarter to $1,028.1 million on higher NGL production volumes. Moreover, higher fee-based volumes from the Permian Basin at the partnership’s gas processing plants benefited the segment.
Natural Gas Pipelines and Services’ gross operating income decreased to $208.4 million from $258.5 million in the year-ago quarter. The downside is owing to lower natural gas pipeline transportation volumes.
Crude Oil Pipelines & Services recorded gross operating income of $481.8 million, which decreased from $496.2 million in the prior-year quarter owing to a decrease in crude oil transportation and marine terminal volumes.
Gross operating income at Petrochemical & Refined Products Services amounted to $315 million compared with $288.4 million a year ago. The improved performance was owing to an increase in segment pipeline transportation volumes.
DCF
Quarterly distribution improved 0.6% year over year to 44.50 cents per common unit or $1.78 per unit on an annualized basis.
Adjusted distributable cash flow was $1,647 million, up from $1,639.5 million a year ago, and provided coverage of 1.7x. Notably, the partnership retained $669 million of distributable cash flow in the third quarter.
Financials
For the quarter, Enterprise Products’ total capital expenditure was $705 million.
As of Sep 30, 2020, its outstanding total debt principal was $30.1 billion. Enterprise Products’ consolidated liquidity amounted to $6 billion, which included unrestricted cash on hand of $1 billion and available borrowing capacity of $5 billion.
Outlook
The partnership foresees investment of $2.9 billion for the growth capital project for 2020. It expects its sustaining capital expenditures for 2020 to reach $300 million. Enterprise Products lowered growth capital investment projections for 2021 and 2022 to $1.6 billion and $800 million, respectively.
The partnership expects energy demand to rise in the long run. Demand growth for cleaner energy sources will likely be driven by the developing countries. As such, crude prices are expected to start increasing in the second half of next year.
Matador Resources’ bottom line for 2021 is expected to surge 187% year over year.
Antero Resources’ bottom line for 2021 is expected to rise 28.2% year over year.
NuStar Energy’s bottom line for 2021 is expected to rise 177.5% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Enterprise Products (EPD) Up Nearly 2% Since Q3 Earnings
Enterprise Products Partners L.P. (EPD - Free Report) stock increased nearly 2% since the partnership reported third-quarter results on Oct 28, wherein earnings met estimates. It has narrowed 2020 growth capital investment projections, while reducing the budget for 2021 and 2022.
It reported third-quarter 2020 adjusted earnings per limited partner unit of 48 cents, in line with the Zacks Consensus Estimate. The bottom line, moreover, improved from the year-ago quarter’s 46 cents per unit.
Revenues declined to $6,922 million from $7,964.1 million in the prior-year quarter. However, the top line beat the consensus estimate of $6,529 million.
Increased transportation volumes in Petrochemical & Refined Products Services, and higher fee-based volumes from the Permian Basin at the partnership’s gas processing plants aided the bottom line. The positives were partially offset by lower natural gas pipeline transportation volumes, and crude oil transportation and marine terminal volumes.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Enterprise Products Partners L.P. price-consensus-eps-surprise-chart | Enterprise Products Partners L.P. Quote
Segmental Performance
Gross operating income at NGL Pipelines & Services increased from $1,008.3 million in the year-ago quarter to $1,028.1 million on higher NGL production volumes. Moreover, higher fee-based volumes from the Permian Basin at the partnership’s gas processing plants benefited the segment.
Natural Gas Pipelines and Services’ gross operating income decreased to $208.4 million from $258.5 million in the year-ago quarter. The downside is owing to lower natural gas pipeline transportation volumes.
Crude Oil Pipelines & Services recorded gross operating income of $481.8 million, which decreased from $496.2 million in the prior-year quarter owing to a decrease in crude oil transportation and marine terminal volumes.
Gross operating income at Petrochemical & Refined Products Services amounted to $315 million compared with $288.4 million a year ago. The improved performance was owing to an increase in segment pipeline transportation volumes.
DCF
Quarterly distribution improved 0.6% year over year to 44.50 cents per common unit or $1.78 per unit on an annualized basis.
Adjusted distributable cash flow was $1,647 million, up from $1,639.5 million a year ago, and provided coverage of 1.7x. Notably, the partnership retained $669 million of distributable cash flow in the third quarter.
Financials
For the quarter, Enterprise Products’ total capital expenditure was $705 million.
As of Sep 30, 2020, its outstanding total debt principal was $30.1 billion. Enterprise Products’ consolidated liquidity amounted to $6 billion, which included unrestricted cash on hand of $1 billion and available borrowing capacity of $5 billion.
Outlook
The partnership foresees investment of $2.9 billion for the growth capital project for 2020. It expects its sustaining capital expenditures for 2020 to reach $300 million. Enterprise Products lowered growth capital investment projections for 2021 and 2022 to $1.6 billion and $800 million, respectively.
The partnership expects energy demand to rise in the long run. Demand growth for cleaner energy sources will likely be driven by the developing countries. As such, crude prices are expected to start increasing in the second half of next year.
Zacks Rank & Stocks to Consider
The partnership currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , Antero Resources Corporation (AR - Free Report) and NuStar Energy L.P. (NS - 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.
Matador Resources’ bottom line for 2021 is expected to surge 187% year over year.
Antero Resources’ bottom line for 2021 is expected to rise 28.2% year over year.
NuStar Energy’s bottom line for 2021 is expected to rise 177.5% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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