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Why Is Antero Midstream Corporation (AM) Up 6.4% Since Last Earnings Report?

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A month has gone by since the last earnings report for Antero Midstream Corporation (AM - Free Report) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Antero Midstream Corporation 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.

Antero Midstream Meets Q4 Earnings Estimates

Antero Midstream Corporation reported fourth-quarter 2020 adjusted earnings per share of 21 cents, in line with the Zacks Consensus Estimate. The bottom line, however, declined from the year-ago quarter’s 35 cents per share.

Quarterly revenues of $203.9 million beat the Zacks Consensus Estimate of $196 million but declined from $239 million in the year-ago quarter.

The results were supported by higher daily compression and gathering volumes of natural gas. The positives were partially offset by lower fresh water delivery volumes and decreased compression fees.

Operational Performance

For fourth-quarter 2020, average daily compression volumes were recorded at 2,851 million cubic feet (MMcf/d), up 18% from the year-ago level of 2,414 MMcf/d. On a per-Mcf basis, compression fee was 19 cents, down 5% from the prior-year quarter’s 20 cents.

For the quarter, high pressure gathering volumes totaled 3,017 MMcf/d, up from the year-ago period’s 2,613 MMcf/d. On a per-Mcf basis, average gathering high pressure fee was 19 cents, up 6% from the prior-year level.

Low pressure gathering volumes averaged 3,053 MMcf/d, up from the fourth-quarter 2019 figure of 2,639 MMcf/d. On a per-Mcf basis, average gathering low pressure fee was 33 cents, flat with the prior-year level.

Fresh water delivery volumes came in at 43 MBbls/d, down from the prior-year level of 148 MBbls/d. On a per-barrel basis, average fresh water distribution fee was $3.96 per barrel for the fourth quarter, improving from the prior-year level of $3.90.

Operating Expenses

Direct operating expenses for the quarter were recorded at $36.5 million. Total expenses for the quarter were $88.9 million.

Balance Sheet

As of Dec 31, Antero Midstream had cash and cash equivalents of $640,000, reflecting a significant decline from $2.4 million in the third quarter. As of the same date, the company had $3,091.6 million of long-term debt, sequentially down from $3,121.8 million. It had a long-term debt to capitalization of 56.1%.

DCF

Distributable cash flow was $158.7 million, with coverage of 1.1x.

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The company has a project backlog of $1.05-$1.15 billion. It is expected to come up with net income in the range of $325-$365 million in 2021 against 2020 net loss of $122.5 million. Antero Midstream is planning to invest capital in the range of $240-$260 million in 2021. Importantly, it recorded 2020 capital expenditure of $208 million.

Notably, 50% of its share repurchase program of $300 million is left, which has been extended till Jun 30, 2023. The company expects free cash flow (before dividends) for 2021 in the range of $415-$455 million, indicating a decline from the 2020 level of $497.9 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Antero Midstream Corporation has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. 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 B. 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 has been net zero. Notably, Antero Midstream Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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