We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Enterprise Products (EPD) Up 10.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Enterprise Products Partners (EPD - Free Report) . Shares have added about 10.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enterprise Products due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Enterprise Products Beats Q4 Earnings, ’21 Growth Capital Set at $1.6B
Enterprise Products Partners reported fourth-quarter 2020 adjusted earnings per limited partner unit of 51 cents, beating the Zacks Consensus Estimate by a penny. The bottom line, however, declined from the year-ago quarter’s 54 cents per unit.
Revenues declined to $7,044 million from $8,005 million in the prior-year quarter. However, the top line beat the consensus estimate of $6,697 million.
The better-than-expected earnings were supported by increased transportation volumes in Petrochemical & Refined Products Services, along with higher margin from the Midland-to-ECHO Pipeline System. The positives were partially offset by lower natural gas pipeline transportation volumes.
Segmental Performance
Gross operating income at NGL Pipelines & Services increased from $1,136 million in the year-ago quarter to $1,144.2 million on higher margin from NGL marketing activities. Moreover, higher NGL marine terminal volumes benefited the segment. Additionally, its Mont Belvieu NGL fractionator units witnessed increased volumes.
Natural Gas Pipelines and Services’ gross operating income decreased to $225.5 million from $238 million in the year-ago quarter. The downside is owing to lower natural gas pipeline transportation volumes. Its East Texas and Haynesville gathering pipeline systems witnessed lower gathering volumes.
Crude Oil Pipelines & Services recorded gross operating income of $428.2 million, which increased from $416.1 million in the prior-year quarter owing to an increase in crude oil export activities at the marine terminals. Moreover, higher margin from the Midland-to-ECHO Pipeline System boosted the segment.
Gross operating income at Petrochemical & Refined Products Services amounted to $296.8 million compared with $233.7 million a year ago. The improved performance was owing to an increase in segment pipeline transportation volumes. Also, marine terminal volumes jumped 20% year over year.
DCF
Quarterly distribution improved 1.1% year over year to 45 cents per common unit or $1.80 per unit on an annualized basis.
Adjusted distributable cash flow was $1,628.8 million, down from $1,633.6 million a year ago, and provided coverage of 1.6x. Notably, the partnership retained $640 million of distributable cash flow in the fourth quarter.
Financials
For the quarter, Enterprise Products’ total capital expenditure was $624 million. While $556 million was used for growth projects, $68 million was utilized for sustaining operating activities.
As of Dec 31, 2020, its outstanding total debt principal was $30.1 billion. Enterprise Products’ consolidated liquidity amounted to $6.1 billion, which included unrestricted cash on hand of $1.1 billion and available borrowing capacity of $5 billion.
Outlook
The partnership invested $3 billion in growth capital projects for 2020. Its sustaining capital expenditure for the year reached $294 million. Enterprise Products reiterated growth capital investment projections for 2021 and 2022 at $1.6 billion and $800 million, respectively. It expects 2021 sustaining capital to be $440 million. It has three major growth capital projects in the pipeline that are expected to come online this year, which will provide the partnership with incremental cash flows. Overall, Enterprise Products currently has around $3.6 billion capital projects under construction.
The partnership expects energy demand to rise in the long run. Global economic recovery is boosting demand, which is further supported by multiple vaccine rollouts and government stimulus.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Enterprise Products has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Enterprise Products has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Enterprise Products (EPD) Up 10.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Enterprise Products Partners (EPD - Free Report) . Shares have added about 10.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enterprise Products due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Enterprise Products Beats Q4 Earnings, ’21 Growth Capital Set at $1.6B
Enterprise Products Partners reported fourth-quarter 2020 adjusted earnings per limited partner unit of 51 cents, beating the Zacks Consensus Estimate by a penny. The bottom line, however, declined from the year-ago quarter’s 54 cents per unit.
Revenues declined to $7,044 million from $8,005 million in the prior-year quarter. However, the top line beat the consensus estimate of $6,697 million.
The better-than-expected earnings were supported by increased transportation volumes in Petrochemical & Refined Products Services, along with higher margin from the Midland-to-ECHO Pipeline System. The positives were partially offset by lower natural gas pipeline transportation volumes.
Segmental Performance
Gross operating income at NGL Pipelines & Services increased from $1,136 million in the year-ago quarter to $1,144.2 million on higher margin from NGL marketing activities. Moreover, higher NGL marine terminal volumes benefited the segment. Additionally, its Mont Belvieu NGL fractionator units witnessed increased volumes.
Natural Gas Pipelines and Services’ gross operating income decreased to $225.5 million from $238 million in the year-ago quarter. The downside is owing to lower natural gas pipeline transportation volumes. Its East Texas and Haynesville gathering pipeline systems witnessed lower gathering volumes.
Crude Oil Pipelines & Services recorded gross operating income of $428.2 million, which increased from $416.1 million in the prior-year quarter owing to an increase in crude oil export activities at the marine terminals. Moreover, higher margin from the Midland-to-ECHO Pipeline System boosted the segment.
Gross operating income at Petrochemical & Refined Products Services amounted to $296.8 million compared with $233.7 million a year ago. The improved performance was owing to an increase in segment pipeline transportation volumes. Also, marine terminal volumes jumped 20% year over year.
DCF
Quarterly distribution improved 1.1% year over year to 45 cents per common unit or $1.80 per unit on an annualized basis.
Adjusted distributable cash flow was $1,628.8 million, down from $1,633.6 million a year ago, and provided coverage of 1.6x. Notably, the partnership retained $640 million of distributable cash flow in the fourth quarter.
Financials
For the quarter, Enterprise Products’ total capital expenditure was $624 million. While $556 million was used for growth projects, $68 million was utilized for sustaining operating activities.
As of Dec 31, 2020, its outstanding total debt principal was $30.1 billion. Enterprise Products’ consolidated liquidity amounted to $6.1 billion, which included unrestricted cash on hand of $1.1 billion and available borrowing capacity of $5 billion.
Outlook
The partnership invested $3 billion in growth capital projects for 2020. Its sustaining capital expenditure for the year reached $294 million. Enterprise Products reiterated growth capital investment projections for 2021 and 2022 at $1.6 billion and $800 million, respectively. It expects 2021 sustaining capital to be $440 million. It has three major growth capital projects in the pipeline that are expected to come online this year, which will provide the partnership with incremental cash flows. Overall, Enterprise Products currently has around $3.6 billion capital projects under construction.
The partnership expects energy demand to rise in the long run. Global economic recovery is boosting demand, which is further supported by multiple vaccine rollouts and government stimulus.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Enterprise Products has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Enterprise Products has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.