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Pembina (PBA) Stock Rises 12.7% Despite Q4 Earnings Miss
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Pembina Pipeline Corporation’s (PBA - Free Report) stock has gone up 12.7% since the fourth-quarter 2021 earnings announcement on Feb 24. The rise could be attributed to a 12% increase in adjusted EBITDA to C$970 million from the year-ago quarter figure and a year-over-year improvement in quarterly sales.
Inside Pembina Pipeline’s Earnings
Pembina Pipeline reported fourth-quarter 2021 earnings per share of 6 cents, missing the Zacks Consensus Estimate of 47 cents and also the year-earlier quarter's earnings of 42 cents. This underperformance was primarily due to the poor performance in the Pipeline segment, which reported a fourth-quarter loss before tax of C$70 million and adjusted EBITDA for the fourth quarter of C$548 million, down 5% from year-ago quarter figures.
Revenues of $1.97 billion improved about 89% year over year. This growth could be attributed to better year-over-year performances in the Facilities and Marketing & New Ventures segments.
Operating cash flow fell approximately 9% to C$697 million. Adjusted EBITDA of C$970 million was C$104 million higher than the figure registered in the fourth quarter of 2020.
In the fourth quarter of 2021, PBA saw volumes of 3,437 thousand barrels of oil equivalent per day (mboe/d), comparing unfavorably with 3,614 mboe/d reported in the prior-year quarter.
Segmental Information
Pipelines: Adjusted EBITDA of C$548 million was down about 5% from the year-ago quarter’s level. This downside resulted from a lower contribution from Ruby Pipeline, lower volumes on Cochin Pipeline and lower volumes on Vantage Pipeline as end users sourced their supply from Redwater Complex, lower revenues from the Nipisi and Mitsue pipelines due to contract expirations and the impact of a lower U.S. dollar exchange rate. The year-over-year volume marginally fell to 2,571 mboe/d.
Facilities: Adjusted EBITDA of C$285 million improved from the year-ago quarter’s C$255 million. The upside was due to contributions from new assets placed into service, including Duvernay III and Prince Rupert Terminal, a greater contribution from Veresen Midstream due to the Hythe Developments project entering service and higher volumes at the Dawson Assets and a realized gain on commodity-related derivatives for certain gas processing fees tied to AECO prices. Volumes of 866 mboe/d dipped about 2% year over year.
Marketing & New Ventures: Adjusted EBITDA of C$183 million compared favorably with C$75 million in the fourth quarter of 2020. The upside was attributable to higher margins on NGL and crude oil sales as a result of higher NGL and crude oil prices, combined with a higher contribution from Aux Sable. The Marketing & New Ventures segment recorded volumes worth 193 mboe/d, up 7% from the same-period level in the prior year.
Pembina Pipeline Corp. Price, Consensus and EPS Surprise
Pembina Pipeline spent C$176 million as capital expenditure during the quarter under review compared with C$161 million a year ago. As of Dec 31, 2021, PBA had cash and cash equivalents worth $45 million and $8.17 billion of long-term debt. Debt-to-capitalization was 43.9%.
Project Updates Pembina Pipeline declared that it executed a new agreement with a second Montney producer, which commits to Pembina volumes from the multiphase development of the producer's northeast British Columbia Montney acreage on a take-or-pay basis upon acreage development. The deal gives the producer the certainty of the transportation outlet from this key area for their future development and access to the remainder of Pembina's integrated value chain.
Pembina Pipeline is still working on Phase VII Peace Pipeline Expansion. The capital cost estimate for the project has been revised to $665 million, lower by $110 million, and is now expected to be in service in mid-2022.
Veresen Midstream is evaluating the opportunity to construct a 200 million cubic feet per day deep cut NGL extraction facility at the Hythe Gas Plant. A final investment decision on Hythe Deep Cut is projected in the first half of 2022.
Pembina Pipeline is still working on the Empress Cogeneration Facility. The project has an anticipated in-service date in the fourth quarter of 2022.
Further, PBA signed a partnership agreement with the Haisla First Nation to develop the proposed Cedar LNG Project, a floating LNG facility that is strategically positioned to leverage Canada's ample natural gas supply and British Columbia's growing LNG infrastructure to produce industry-leading low–carbon, low-cost Canadian LNG for overseas markets.
Guidance
For full-year 2022, Pembina Pipeline expects an adjusted EBITDA projection in the C$3.35-C$3.55 billion range.
Cash flow from operating activities is likely to surpass dividend payments and the capital expenditure program this year.
Pembina Pipeline said that it expects to allot up to the first C$200 million of the excess cash flow to common share repurchases by mid-2022, representing 1% of the company's common shares.
Ranger Oil’s stock has rallied 125.7% in a year. The Zacks Consensus Estimate for Ranger Oil’s 2022 earnings is projected at $9.46 per share, which is an increase of a massive 72.6% from the projected year-ago earnings of $5.48.
ROCC beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 27.3%.
The Zacks Consensus Estimate for ExxonMobil’s 2022 earnings has been revised upward by about 22.9% over the past 60 days from $6.12 to $7.52 per share. ExxonMobil is valued at around $370 billion
ExxonMobil beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 5.8%. XOM stock has increased around 46.8% in a year.
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Pembina (PBA) Stock Rises 12.7% Despite Q4 Earnings Miss
Pembina Pipeline Corporation’s (PBA - Free Report) stock has gone up 12.7% since the fourth-quarter 2021 earnings announcement on Feb 24. The rise could be attributed to a 12% increase in adjusted EBITDA to C$970 million from the year-ago quarter figure and a year-over-year improvement in quarterly sales.
Inside Pembina Pipeline’s Earnings
Pembina Pipeline reported fourth-quarter 2021 earnings per share of 6 cents, missing the Zacks Consensus Estimate of 47 cents and also the year-earlier quarter's earnings of 42 cents. This underperformance was primarily due to the poor performance in the Pipeline segment, which reported a fourth-quarter loss before tax of C$70 million and adjusted EBITDA for the fourth quarter of C$548 million, down 5% from year-ago quarter figures.
Revenues of $1.97 billion improved about 89% year over year. This growth could be attributed to better year-over-year performances in the Facilities and Marketing & New Ventures segments.
Operating cash flow fell approximately 9% to C$697 million. Adjusted EBITDA of C$970 million was C$104 million higher than the figure registered in the fourth quarter of 2020.
In the fourth quarter of 2021, PBA saw volumes of 3,437 thousand barrels of oil equivalent per day (mboe/d), comparing unfavorably with 3,614 mboe/d reported in the prior-year quarter.
Segmental Information
Pipelines: Adjusted EBITDA of C$548 million was down about 5% from the year-ago quarter’s level. This downside resulted from a lower contribution from Ruby Pipeline, lower volumes on Cochin Pipeline and lower volumes on Vantage Pipeline as end users sourced their supply from Redwater Complex, lower revenues from the Nipisi and Mitsue pipelines due to contract expirations and the impact of a lower U.S. dollar exchange rate. The year-over-year volume marginally fell to 2,571 mboe/d.
Facilities: Adjusted EBITDA of C$285 million improved from the year-ago quarter’s C$255 million. The upside was due to contributions from new assets placed into service, including Duvernay III and Prince Rupert Terminal, a greater contribution from Veresen Midstream due to the Hythe Developments project entering service and higher volumes at the Dawson Assets and a realized gain on commodity-related derivatives for certain gas processing fees tied to AECO prices. Volumes of 866 mboe/d dipped about 2% year over year.
Marketing & New Ventures: Adjusted EBITDA of C$183 million compared favorably with C$75 million in the fourth quarter of 2020. The upside was attributable to higher margins on NGL and crude oil sales as a result of higher NGL and crude oil prices, combined with a higher contribution from Aux Sable. The Marketing & New Ventures segment recorded volumes worth 193 mboe/d, up 7% from the same-period level in the prior year.
Pembina Pipeline Corp. Price, Consensus and EPS Surprise
Pembina Pipeline Corp. price-consensus-eps-surprise-chart | Pembina Pipeline Corp. Quote
Capital Expenditure & Balance Sheet
Pembina Pipeline spent C$176 million as capital expenditure during the quarter under review compared with C$161 million a year ago. As of Dec 31, 2021, PBA had cash and cash equivalents worth $45 million and $8.17 billion of long-term debt. Debt-to-capitalization was 43.9%.
Project Updates
Pembina Pipeline declared that it executed a new agreement with a second Montney producer, which commits to Pembina volumes from the multiphase development of the producer's northeast British Columbia Montney acreage on a take-or-pay basis upon acreage development. The deal gives the producer the certainty of the transportation outlet from this key area for their future development and access to the remainder of Pembina's integrated value chain.
Pembina Pipeline is still working on Phase VII Peace Pipeline Expansion. The capital cost estimate for the project has been revised to $665 million, lower by $110 million, and is now expected to be in service in mid-2022.
Veresen Midstream is evaluating the opportunity to construct a 200 million cubic feet per day deep cut NGL extraction facility at the Hythe Gas Plant. A final investment decision on Hythe Deep Cut is projected in the first half of 2022.
Pembina Pipeline is still working on the Empress Cogeneration Facility. The project has an anticipated in-service date in the fourth quarter of 2022.
Further, PBA signed a partnership agreement with the Haisla First Nation to develop the proposed Cedar LNG Project, a floating LNG facility that is strategically positioned to leverage Canada's ample natural gas supply and British Columbia's growing LNG infrastructure to produce industry-leading low–carbon, low-cost Canadian LNG for overseas markets.
Guidance
For full-year 2022, Pembina Pipeline expects an adjusted EBITDA projection in the C$3.35-C$3.55 billion range.
Cash flow from operating activities is likely to surpass dividend payments and the capital expenditure program this year.
Pembina Pipeline said that it expects to allot up to the first C$200 million of the excess cash flow to common share repurchases by mid-2022, representing 1% of the company's common shares.
Zacks Rank & Key Picks
Pembina currently carries a Zacks Rank #3 (Hold). Investors interested in the energy space might look at the following companies. Ranger Oil , ExxonMobil (XOM - Free Report) and SM Energy (SM - Free Report) each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ranger Oil’s stock has rallied 125.7% in a year. The Zacks Consensus Estimate for Ranger Oil’s 2022 earnings is projected at $9.46 per share, which is an increase of a massive 72.6% from the projected year-ago earnings of $5.48.
ROCC beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 27.3%.
The Zacks Consensus Estimate for ExxonMobil’s 2022 earnings has been revised upward by about 22.9% over the past 60 days from $6.12 to $7.52 per share. ExxonMobil is valued at around $370 billion
ExxonMobil beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 5.8%. XOM stock has increased around 46.8% in a year.
The Zacks Consensus Estimate for SM Energy’s 2022 earnings is projected at $6.62 per share, up about 257.8% from the projected year-ago earnings of $1.85.
SM Energy beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 153.9%. SM stock has gone up 125.2% in a year.