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Crestwood (CEQP) Dips 2.7% Since Reporting Weak Q1 Earnings

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Crestwood Equity Partners LP’s (CEQP - Free Report) units have declined 2.7% since the first-quarter 2022 earnings announcement on Apr 26. The downward stock movement primarily occurred as the partnership’s first-quarter earnings lagged estimates.

The partnership incurred a first-quarter adjusted loss of 4 cents per unit against the Zacks Consensus Estimate of earnings of 57 cents. The bottom line fared better than the year-ago adjusted loss of 86 cents per unit.

Total revenues surged to $1,583.8 million from $1,032.7 million in the prior-year quarter. Also, the top line beat the Zacks Consensus Estimate of $1,445 million.

Lower-than-expected quarterly earnings can be attributed to higher operating expenses. The negatives were partially offset by higher gas gathering and processing volumes.

Crestwood Equity Partners LP Price, Consensus and EPS Surprise

 

Crestwood Equity Partners LP Price, Consensus and EPS Surprise

Crestwood Equity Partners LP price-consensus-eps-surprise-chart | Crestwood Equity Partners LP Quote

Cash Distribution

For the first quarter, Crestwood’s board of directors announced a quarterly cash distribution of 65.5 cents per limited partner unit, suggesting a 5% increase quarter over quarter. The distribution is payable on May 13, 2022, to unitholders of record as of May 6, 2022.

Segmental Performance

Gathering and Processing North: The segment generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $133.3 million, up from $103.6 million in the year-ago quarter. Operating and maintenance expenses increased to $23.7 million from the year-ago level of $15.1 million.

Total gas gathering volumes for the quarter were 345.6 million cubic feet per day (MMcf/d), up from 232.5 MMcf/d a year ago. Gathering volumes increased in the Williston Basin, while the same declined marginally in the Powder River Basin. Total processing volumes increased to 374.4 MMcf/d from the year-ago level of 227.1 MMcf/d.

Gathering and Processing South: The segment generated an EBITDA of $27.4 million, up from $15.9 million in the year-ago quarter. Operating and maintenance expenses increased to $6.7 million from the year-ago level of $6.3 million.

Total gas gathering volumes for the quarter were 662.9 MMcf/d, up from 600.9 MMcf/d a year ago. Gathering volumes declined in Marcellus, while the same rose in Delaware and Bakken shale play. Total processing volumes increased to 188 MMcf/d from the year-ago level of 129.9 MMcf/d. Yet, compression volumes declined to 241.5 MMcf/d from 278.3 MMcf/d in the year-ago period.

Storage and Logistics: It generated earnings of $15.5 million, turning around from a loss of $38.5 million in the year-ago quarter. Operating and maintenance expenses of $12 million increased from the year-ago quarter’s $11.4 million.

NGL volumes sold or processed in the first quarter were 160 MBbls/d, up from 151.5 MBbls/d in the year-ago period.

Expenses

Total operating expenses and others increased to $164.4 million from $112.1 million in the year-ago period.

General and administrative expenses increased to $43.4 million in the March-end quarter from $18.7 million in first-quarter 2021. Also, operation and maintenance costs increased to $42.4 million from $32.8 million a year ago.

Cash Flow

Distributable cash flow in the first quarter was $116.7 million, up from $108.4 million in the year-ago period.

Free cash flow after distributions was $28.3 million for the March-end quarter, down from $63.6 million in the year-ago period.

Balance Sheet

As of Mar 31, 2022, the partnership had $11.9 million in cash, down from $13.3 million at the fourth-quarter end. Total debt of $2,810.1 million at the first-quarter end increased from $2,052.3 million at the fourth-quarter end.

Outlook

For 2022, Crestwood reiterated its adjusted EBITDA guidance at $780-$840 million. The partnership expects free cash flow after paying distributions of $75-$135 million.

Crestwood expects capital spending related to growth projects of $160-$180 million for the year.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following stocks that reported solid first-quarter earnings numbers and presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enterprise Products Partners L.P. (EPD - Free Report) reported first-quarter 2022 adjusted earnings per limited partner unit of 60 cents, beating the Zacks Consensus Estimate of 52 cents. The better-than-expected earnings were driven by higher contributions from the NGL Pipelines & Services business.

As of Mar 31, 2022, EPD’s outstanding total debt principal was $29.8 billion. Enterprise’s consolidated liquidity amounted to $3.9 billion, down sequentially from $7.3 billion. The total liquidity amount included unrestricted cash on hand and available borrowing capacity under its revolving credit facility.

Matador Resources Company (MTDR - Free Report) reported adjusted earnings of $2.32 per share, beating the Zacks Consensus Estimate of $2.05 per share. The strong quarterly earnings can be attributed to increased oil-equivalent production volumes and higher commodity price realizations.

As of Mar 31, 2022, Matador had cash and restricted cash of $120.2 million. MTDR's long-term debt was $1,498 million, including $50 million of borrowings under its credit agreement. Debt to capitalization was 39.1%.

Range Resources Corporation (RRC - Free Report) reported first-quarter 2022 adjusted earnings of $1.18 per share, beating the Zacks Consensus Estimate of $1.15 per share. The strong quarterly earnings can be attributed to higher realizations of commodity prices.

In first-quarter 2022, Range Resources’ board of directors approved the authorization of a $500-million share repurchase program. At the first-quarter end, it had total debt of $1,829.7 million. RRC had a debt-to-capitalization of 53.3%.