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Pembina (PBA) Stock Rises 9% After Q1 Earnings Beat Estimates

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Pembina Pipeline Corporation’s (PBA - Free Report) stock has gone up 9.1% since the first-quarter 2022 earnings announcement on May 5.

The rise could be attributed to Pembina Pipeline’s first-quarter earnings beating the consensus mark and a year-over-year improvement in quarterly sales.

Inside Pembina Pipeline’s Earnings

Pembina Pipeline reported first-quarter 2022 earnings per share of 64 cents, beating the Zacks Consensus Estimate of 57 cents and also the year-earlier quarter's earnings of 39 cents. This outperformance was primarily due to the healthy performance in the Pipeline segment, which reported first-quarter earnings before tax of C$361 million, and year-over-year improvements in the earnings of two other segments, namely facilities and marketing & new ventures.

Quarterly Revenues of $2.4 billion improved about 53% year over year. This growth could be attributed to better year-over-year performances in various segments of the company.

Operating cash flow rose approximately 44% to C$655 million. Adjusted EBITDA of C$1006 million was C$171 million higher than the figure registered in the first quarter of 2021.

In the first quarter of 2022, PBA saw volumes of 3,369 thousand barrels of oil equivalent per day (mboe/d), comparing marginally unfavorably to the 3,482 mboe/d reported in the prior-year quarter.

Pembina Pipeline Corp. Price, Consensus and EPS Surprise

Pembina Pipeline Corp. Price, Consensus and EPS Surprise

Pembina Pipeline Corp. price-consensus-eps-surprise-chart | Pembina Pipeline Corp. Quote

Segmental Information

Pipelines: Adjusted EBITDA of C$521 million was down about 1.5% from the year-ago quarter’s level. This downside was due to a lower share of profit from Ruby and the expiration of contracts on the Nipisi and Mitsue pipeline systems. The year-over-year volume marginally fell about 3.6% to 2,493 mboe/d.

Facilities: Adjusted EBITDA of C$281 million improved from the year-ago quarter’s C$269 million. The upside was due to a full quarter contribution from the Prince Rupert Terminal, which was placed into service in March 2021, and a higher share of profit from Veresen Midstream due to Hythe Developments placed into service in March 2021 and increased volumes at the Dawson Assets. Volumes of 876 mboe/d dipped about 2.1% year over year.

Marketing & New Ventures: Adjusted EBITDA of C$268 million compared favorably with C$90 million in the first quarter of 2021. The upside was attributable to improvements in commodity market prices, including NGL, crude oil and condensate, which contributed to a significant quarter-over-quarter increase in the results of this segment. The Marketing & New Ventures segment recorded volumes worth 206 mboe/d, down 7% from the same-period level in the prior year.

Capital Expenditure & Balance Sheet

Pembina Pipeline spent C$179 million as capital expenditure during the quarter under review compared with C$127 million a year ago. As of Mar 31, 2022, PBA had cash and cash equivalents worth C$28 million and C$9.56 billion in long-term debt. Debt-to-capitalization was 39.7%.

Guidance

For full-year 2022, Pembina Pipeline raised its adjusted EBITDA guidance from the earlier C$3.35-C$3.55 billion range to the C$3.45-C$3.6 billion range.

Cash flow from operating activities is expected to exceed dividends and the capital investment program in 2022.

Pembina Pipeline earlier stated that it would allot up to the first C$200 million of the excess cash flow for common share repurchases by mid-2022, of which PBA has completed about C$58 million of repurchase.  

Zacks Rank & Key Picks

Pembina Pipeline currently carries a Zacks Rank #3 (Hold). Investors interested in the energy space might look at the following companies Ranger Oil (ROCC - Free Report) , Civitas Resources (CIVI - Free Report) and Earthstone Energy (ESTE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ranger Oil’s 2022 earnings is projected at $14.14 per share, which is an increase of 158% from the projected year-ago earnings of $5.48.

Ranger Oil beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 56.4%. ROCC stock has rallied 103.9% in a year.

The Zacks Consensus Estimate for Civitas’ 2022 earnings is projected at $14.76 per share, up about 403.7% from the projected year-ago figure of $2.93.

Civitas stock has gone up 75.9% in a year. The Zacks Consensus Estimate for CIVI’s 2022 earnings has been revised upward by about 30.3% over the past 60 days from $11.32 to $14.76 per share.

The Zacks Consensus Estimate for Earthstone’s 2022 earnings has been revised upward by about 41.8% over the past 60 days from $2.80 to $3.97 per share. Earthstone’s stock has increased 110.8% in a year.

The Zacks Consensus Estimate for ESTE’s 2022 earnings is projected at $3.97 per share, up about 217.6% from the projected year-ago earnings of $1.25.