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USA Compression (USAC) Incurs Wider-Than-Expected Q4 Loss

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USA Compression Partners, LP (USAC - Free Report) reported fourth-quarter 2020 net loss per common unit of 14 cents, wider than the Zacks Consensus Estimate of a loss of 12 cents and the year-ago loss of a penny. The unfavorable comparisons were due to lower utilization.

Revenues of $158.4 million were 11.1% below the year-ago quarter and missed the Zacks Consensus Estimate of $159 million due to lower-than-expected revenue-generating horsepower capacity, which, at 3,004,069 horsepower, fell short of the Zacks Consensus Estimate of 3,009,000 horsepower.

Adjusted EBITDA was down 10% to $98.3 million. Moreover, the partnership’s distributable cash flow fell from $58 million in the prior-year quarter to $50.5 million.

The partnership reported operating cash flow of $97.5 million in the quarter. This marked an increase from $91.7 million that it had generated in the prior-year quarter. Also, gross operating margin, at 68.4%, marked an improvement over the year-ago period’s 68.2%.

In the fourth quarter, the partnership’s revenue-generating horsepower capacity decreased 9.2% from last year’s corresponding period to 3,004,069 horsepower.  Further, the average monthly revenue per horsepower fell to $16.55 from $16.82 in the fourth quarter of 2019. Meanwhile, USA Compression Partners’ average quarterly horsepower utilization rate came in at 83%, down from 93.9% in the year-ago period.

USA Compression Partners, LP Price, Consensus and EPS Surprise

USA Compression Partners, LP Price, Consensus and EPS Surprise

USA Compression Partners, LP price-consensus-eps-surprise-chart | USA Compression Partners, LP Quote

DCF, Capex & Balance Sheet

USA Compression Partners reported that its DCF available to limited partners for the fourth quarter totaled $50.5 million (providing 0.99X distribution coverage), down 13% from the year-ago level. Notably, on Jan 14, the partnership announced fourth-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis).

USA Compression Partners spent $10.9 million on growth capex. The partnership’s maintenance capex consisted of $5.4 million.

As of Dec 31, 2020, the partnership had $1.9 billion in net long-term debt. Net debt-to-capitalization was approximately 85.1%.


For 2021, USA Compression Partners projects full-year DCF between $193 million and $213 million. Meanwhile, it sees adjusted EBITDA of $385-$405 million.

Zacks Rank & Stock Picks

USA Compression Partners currently carries a Zacks Rank #4 (Sell).

Some better-ranked players in the energy space are PDC Energy (PDCE - Free Report) , Royal Dutch Shell and Pioneer Natural Resources Company (PXD - Free Report) . Each of the companies sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

PDC Energy has an expected earnings growth rate of 165.91% for the current year.  

Royal Dutch Shell has an expected earnings growth rate of 163.71% for the current year.

Pioneer Natural Resources has an expected earnings growth rate of 323.95% for the current year.

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