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USA Compression (USAC) Makes No Impact Despite Q2 Narrower Loss

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USA Compression Partners, LP (USAC - Free Report) stock has seen no significant change since the firm’s second-quarter 2021 earnings release on Aug 3. Even though this industry player's overall results were tepid with narrower-than-anticipated loss and a top-line miss, its efforts to restrain cost and expenses are appreciative.

Delving Deeper

USA Compression Partners reported second-quarter 2021 net loss per common unit of 10 cents, narrower than the Zacks Consensus Estimate of a loss of 13 cents, attributable to lower costs and expenses.

However, the loss was wider than the year-ago quarter’s loss per share of 6 cents. The unfavorable comparisons were due to lower-than-expected revenue-generating horsepower capacity, which came in at 2,944,909 horsepower, falling short of the Zacks Consensus Estimate of 3,007,000 horsepower.

Revenues of $157 million were 7.1% lower than the year-ago quarter’s reading and also missed the Zacks Consensus Estimate of $160 million.

Adjusted EBITDA was down 5.2% to $100 million. Moreover, the partnership’s distributable cash flow fell from $58.7 million in the prior-year quarter to $52.5 million.

The firm reported an operating cash flow of $99.5 million in the quarter, up from $97.4 million generated in the prior-year quarter. Also, gross operating margin of 70.9% improved from the year-ago period’s 70.4%.

In the second quarter, the firm’s revenue-generating horsepower capacity decreased 7.7% to 2,944,909 horsepower from the level recorded in the corresponding period of last year. Further, the average monthly revenue per horsepower fell to $16.55 from $16.79 in the second quarter of 2020. USA Compression Partners’ average quarterly horsepower utilization rate came in at 82.4%, down from 88% in the year-ago period.

DCF, Capex & Balance Sheet

USA Compression Partners’ DCF available to limited partners for the second quarter totaled $52.5 million (providing 1.03X distribution coverage), down 10.6% from the year-ago level. On Jul 15, the firm announced second-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis).

It spent $8.2 million as growth capex. The partnership’s maintenance capex consisted of $5 million.

As of Jun 30, 2021, the firm had $1.93 billion of net long-term debt. Net debt-to-capitalization was 89.9%.

Guidance

For 2021, USA Compression Partners projects DCF between $193 million and $213 million. It estimates adjusted EBITDA within $385-$405 million.

Zacks Rank & Key Picks

USA Compression Partners currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the  energy  space are Matador Resources Co. (MTDR - Free Report) , Devon Energy Corp. (DVN - Free Report) and Continental Resources, Inc. , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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