A month has gone by since the last earnings report for Crestwood Equity Partners LP . Shares have lost about 3.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crestwood Equity Partners LP due for a breakout? 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 drivers.
Crestwood Misses Q1 Earnings Estimates, Revenues Beat
Crestwood reported first-quarter 2021 adjusted loss per unit of 86 cents versus the Zacks Consensus Estimate of earnings of 37 cents. The bottom line also deteriorated from the year-ago loss of 66 cents per unit.
However, revenues surged to $1,032.7 million from $727.9 million in the prior-year quarter. Moreover, the top line beat the consensus mark of $956 million.
The weak first-quarter earnings were caused by lower gathering, processing and compression volumes. Moreover, decreased COLT Hub rail loading volumes added to the negatives. The negatives were partially offset by increased natural gas liquids (NGL) volumes sold or processed.
Segmental Performance
Gathering and Processing: The segment generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $119.5 million, up from $39.1 million in the year-ago quarter. Operating and maintenance expenses decreased to $21.4 million from the year-ago level of $27 million.
Total gas gathering volumes for the quarter were 833.4 million cubic feet per day (MMcf/d), down from 1,029.6 MMcf/d a year ago. Gathering volumes declined in Marcellus, Barnett, Delaware and Powder River Basin. Total processing volumes decreased to 357 MMcf/d from the year-ago level of 408.3 MMcf/d. Moreover, compression volumes declined to 278.3 MMcf/d from 377.1 MMcf/d in the year-ago period.
Storage and Transportation: The unit generated operating loss of $99.5 million against profit of $9.2 million in the year-ago quarter. Operating and maintenance expenses decreased to $0.6 million from the year-ago level of $1.4 million.
Interruptible services in the Gulf Coast storage declined to 49.9 MMcf/d from 76.3 MMcf/d in the prior-year quarter. Also, rail loading at the COLT hub declined to 51.5 thousand barrels per day (MBbls/d) from 61 MBbls/d a year ago.
Marketing, Supply and Logistics: It generated EBITDA of $61 million, up from $31.8 million in the year-ago quarter. Operating and maintenance expenses increased to $10.8 million from the year-ago level of $9.2 million.
NGL volumes sold or processed in the first quarter came in at 151.5 MBbls/d, up from 105.8 MBbls/d in the year-ago period.
Expenses
Total operating expenses and others decreased to $112.1 million from $189.9 million in the year-ago period.
Operations and maintenance costs decreased to $32.8 million from $37.6 million a year ago. General and administrative expenses, however, rose to $18.7 million for the March quarter from $14.9 million in first-quarter 2020.
Cash Flow
Distributable cash flow for the first quarter was recorded at $108.4 million, up from $94 million in the year-ago period.
Free cash flow after distributions was recorded at $63.6 million for the March quarter versus an outflow of $28.7 million in the year-ago period.
Balance Sheet
As of Mar 31, 2021, the partnership had $16.3 million in cash, up from $14 million at fourth quarter-end. Total debt of $2,588.4 million at first quarter-end increased from $2,484 million at fourth quarter-end. The partnership has a long-term debt to capitalization of 60.3%.
Guidance
Following several strategic transactions in the first quarter, the partnership revised 2021 adjusted EBITDA expectation to the $575-$625 million range, higher than the previous guidance of $550-$610 million. Net income is now expected within $100-$150 million. Markedly, the partnership now estimates free cash flow after paying distributions within $130-$180 million, higher than the previous projection of $90-$160 million. Furthermore, the board of directors authorized a $175-million common and preferred unit buyback program through Dec 31, 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 211.11% due to these changes.
VGM Scores
Currently, Crestwood Equity Partners LP has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Crestwood Equity Partners LP has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Image: Bigstock
Why Is Crestwood Equity Partners LP (CEQP) Down 3.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Crestwood Equity Partners LP . Shares have lost about 3.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crestwood Equity Partners LP due for a breakout? 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 drivers.
Crestwood Misses Q1 Earnings Estimates, Revenues Beat
Crestwood reported first-quarter 2021 adjusted loss per unit of 86 cents versus the Zacks Consensus Estimate of earnings of 37 cents. The bottom line also deteriorated from the year-ago loss of 66 cents per unit.
However, revenues surged to $1,032.7 million from $727.9 million in the prior-year quarter. Moreover, the top line beat the consensus mark of $956 million.
The weak first-quarter earnings were caused by lower gathering, processing and compression volumes. Moreover, decreased COLT Hub rail loading volumes added to the negatives. The negatives were partially offset by increased natural gas liquids (NGL) volumes sold or processed.
Segmental Performance
Gathering and Processing: The segment generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $119.5 million, up from $39.1 million in the year-ago quarter. Operating and maintenance expenses decreased to $21.4 million from the year-ago level of $27 million.
Total gas gathering volumes for the quarter were 833.4 million cubic feet per day (MMcf/d), down from 1,029.6 MMcf/d a year ago. Gathering volumes declined in Marcellus, Barnett, Delaware and Powder River Basin. Total processing volumes decreased to 357 MMcf/d from the year-ago level of 408.3 MMcf/d. Moreover, compression volumes declined to 278.3 MMcf/d from 377.1 MMcf/d in the year-ago period.
Storage and Transportation: The unit generated operating loss of $99.5 million against profit of $9.2 million in the year-ago quarter. Operating and maintenance expenses decreased to $0.6 million from the year-ago level of $1.4 million.
Interruptible services in the Gulf Coast storage declined to 49.9 MMcf/d from 76.3 MMcf/d in the prior-year quarter. Also, rail loading at the COLT hub declined to 51.5 thousand barrels per day (MBbls/d) from 61 MBbls/d a year ago.
Marketing, Supply and Logistics: It generated EBITDA of $61 million, up from $31.8 million in the year-ago quarter. Operating and maintenance expenses increased to $10.8 million from the year-ago level of $9.2 million.
NGL volumes sold or processed in the first quarter came in at 151.5 MBbls/d, up from 105.8 MBbls/d in the year-ago period.
Expenses
Total operating expenses and others decreased to $112.1 million from $189.9 million in the year-ago period.
Operations and maintenance costs decreased to $32.8 million from $37.6 million a year ago. General and administrative expenses, however, rose to $18.7 million for the March quarter from $14.9 million in first-quarter 2020.
Cash Flow
Distributable cash flow for the first quarter was recorded at $108.4 million, up from $94 million in the year-ago period.
Free cash flow after distributions was recorded at $63.6 million for the March quarter versus an outflow of $28.7 million in the year-ago period.
Balance Sheet
As of Mar 31, 2021, the partnership had $16.3 million in cash, up from $14 million at fourth quarter-end. Total debt of $2,588.4 million at first quarter-end increased from $2,484 million at fourth quarter-end. The partnership has a long-term debt to capitalization of 60.3%.
Guidance
Following several strategic transactions in the first quarter, the partnership revised 2021 adjusted EBITDA expectation to the $575-$625 million range, higher than the previous guidance of $550-$610 million. Net income is now expected within $100-$150 million. Markedly, the partnership now estimates free cash flow after paying distributions within $130-$180 million, higher than the previous projection of $90-$160 million. Furthermore, the board of directors authorized a $175-million common and preferred unit buyback program through Dec 31, 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 211.11% due to these changes.
VGM Scores
Currently, Crestwood Equity Partners LP has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Crestwood Equity Partners LP has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.