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MPLX Jumps 4.4% Since Q3 Earnings & Sales Beat Estimates
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MPLX LP’s (MPLX - Free Report) units have jumped 4.4% since it reported strong third-quarter results on Nov 2 backed by increased contributions from logistics and storage operations as well as the gathering and processing business. Increased pipeline throughputs and natural gas liquids prices buoyed third-quarter results.
It reported third-quarter earnings of 74 cents per unit, beating the Zacks Consensus Estimate of 71 cents. The bottom line also improved from the year-ago earnings of 61 cents per unit.
Total quarterly revenues of $2,559 million beat the Zacks Consensus Estimate of $2,233 million. The top line also increased from third-quarter 2020 sales of $2,247 million.
MPLX’s adjusted EBITDA from the Logistics and Storage segment increased from $893 million a year ago to $904 million. Higher revenues and lower operating expenses aided the segment. Total pipeline throughputs for the third quarter came in at 5.5 million barrels per day (bpd), marking a 17% increase from the year-ago period.
Adjusted EBITDA from the Gathering and Processing segment was recorded at $485 million, up from $442 million in the prior-year quarter. The segment benefited from higher natural gas liquid prices and lower operating expenses, partially offset by reduced processed and fractionated volumes. While gathered volumes remained flat at 5.4 billion cubic feet per day (Bcf/d) with the year-ago period, processed volumes of 8.4 Bcf/d marked a 2% decrease.
Costs and Expenses
For third-quarter 2021, total costs and expenses were recorded at $1,528 million, up from the year-ago quarter’s $1,348 million. Expenses related to operations increased to $752 million from $508 million in the prior-year quarter.
Cash Flow
Distributable cash flow attributable to MPLX for third-quarter 2021 was $1,191 million, providing 1.61X distribution coverage, up from $1,067 million in the year-ago quarter. Distribution per unit was $1.28 for the reported quarter, up from 68.75 cents in the year-ago period.
Free cash flow for the quarter under review increased to $1,055 million from $944 million recorded in the corresponding period of 2020.
Balance Sheet
As of Sep 30, 2021, the partnership’s cash and cash equivalents were $39 million, up sequentially from $8 million. Its total debt amounted to $19.6 billion, marginally down from the second quarter’s $19.7 billion, while debt to capitalization was 60.3%.
Outlook
For 2021, the partnership expects total capital spending of $650 million, lower than the previously mentioned $800 million. As such, fourth-quarter growth capital will likely be in the range of $200-$210 million, while maintenance capital will be around $50 million. It expects to continue generating excess free cash flow, which will enhance financial flexibility, including the ability to return incremental capital to unitholders.
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MPLX Jumps 4.4% Since Q3 Earnings & Sales Beat Estimates
MPLX LP’s (MPLX - Free Report) units have jumped 4.4% since it reported strong third-quarter results on Nov 2 backed by increased contributions from logistics and storage operations as well as the gathering and processing business. Increased pipeline throughputs and natural gas liquids prices buoyed third-quarter results.
It reported third-quarter earnings of 74 cents per unit, beating the Zacks Consensus Estimate of 71 cents. The bottom line also improved from the year-ago earnings of 61 cents per unit.
Total quarterly revenues of $2,559 million beat the Zacks Consensus Estimate of $2,233 million. The top line also increased from third-quarter 2020 sales of $2,247 million.
MPLX LP Price, Consensus and EPS Surprise
MPLX LP price-consensus-eps-surprise-chart | MPLX LP Quote
Segmental Highlights
MPLX’s adjusted EBITDA from the Logistics and Storage segment increased from $893 million a year ago to $904 million. Higher revenues and lower operating expenses aided the segment. Total pipeline throughputs for the third quarter came in at 5.5 million barrels per day (bpd), marking a 17% increase from the year-ago period.
Adjusted EBITDA from the Gathering and Processing segment was recorded at $485 million, up from $442 million in the prior-year quarter. The segment benefited from higher natural gas liquid prices and lower operating expenses, partially offset by reduced processed and fractionated volumes. While gathered volumes remained flat at 5.4 billion cubic feet per day (Bcf/d) with the year-ago period, processed volumes of 8.4 Bcf/d marked a 2% decrease.
Costs and Expenses
For third-quarter 2021, total costs and expenses were recorded at $1,528 million, up from the year-ago quarter’s $1,348 million. Expenses related to operations increased to $752 million from $508 million in the prior-year quarter.
Cash Flow
Distributable cash flow attributable to MPLX for third-quarter 2021 was $1,191 million, providing 1.61X distribution coverage, up from $1,067 million in the year-ago quarter. Distribution per unit was $1.28 for the reported quarter, up from 68.75 cents in the year-ago period.
Free cash flow for the quarter under review increased to $1,055 million from $944 million recorded in the corresponding period of 2020.
Balance Sheet
As of Sep 30, 2021, the partnership’s cash and cash equivalents were $39 million, up sequentially from $8 million. Its total debt amounted to $19.6 billion, marginally down from the second quarter’s $19.7 billion, while debt to capitalization was 60.3%.
Outlook
For 2021, the partnership expects total capital spending of $650 million, lower than the previously mentioned $800 million. As such, fourth-quarter growth capital will likely be in the range of $200-$210 million, while maintenance capital will be around $50 million. It expects to continue generating excess free cash flow, which will enhance financial flexibility, including the ability to return incremental capital to unitholders.
Zacks Rank & Other Stocks to Consider
The partnership currently has a Zacks Rank #2 (Buy). Other top-ranked stocks from the energy space include Continental Resources, Inc. , HollyFrontier Corporation and PHX Minerals Inc. (PHX - Free Report) , each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Continental Resources’ bottom line for 2021 is expected to rise to $4.52 per share from a loss of $1.17 a year ago.
HollyFrontier’s bottom line for 2021 is expected to rise 324.1% year over year.
PHX Minerals’ bottom line for the current year is expected to rise 280% year over year.