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USA Compression (USAC) Q2 Loss Wider Than Estimates, Sales Up

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USA Compression Partners, LP (USAC - Free Report) reported a second-quarter 2022 net loss of 3 cents per common unit, marginally wider than the Zacks Consensus Estimate of a loss of 2 cents, due to higher total costs and expenses.

However, the loss was narrower than the year-ago quarter’s loss of 10 cents per share. This favorable comparison was due to the partnership posting a net income of $9.1 million for the second quarter of 2022 compared with the net income of just $2.7 million for the same period last year.

Revenues of $171.5 million were approximately 9.5% higher than the year-ago quarter’s reading of $156.6 million.

Adjusted EBITDA increased about 5.4% to $105.4 million from the last year’s second-quarter figure of $99.9 million. Moreover, the partnership’s distributable cash flow rose from $52.5 million in the prior-year quarter to $55.6 million.

The firm reported operating cash flow of $94.2 million in the quarter, down from the $99.5 million generated in the prior-year quarter. Also, its gross operating margin of 67.8% declined from the year-ago period’s 70.9%.

In the second quarter, USA Compression Partners’ revenue-generating horsepower capacity increased about 2.8% to 3,027,886 horsepower from the level recorded in the corresponding period of last year.  Average monthly revenues per horsepower were $17.20, higher than the year-ago quarter’s figure of $16.55. USAC’s average quarterly horsepower utilization rate came in at 87.9%, higher than 82.4% in the year-ago period.

DCF, Capex & Balance Sheet

USA Compression Partners’ DCF available to limited partners for the second quarter equaled $55.6 million (providing 1.08X distribution coverage), up 5.9% from the year-ago level. On Jul 14, the firm announced a second-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis). The distribution will be paid out on Aug 5, 2022 to common unitholders of record as of Jul 25, 2022.

It spent $32.2 million as growth capex. The partnership’s maintenance capex amounted to $6.1 million.

As of June 2022, USA Compression Partners had about $2.02 billion of net long-term debt.

Guidance

For 2022, USAC maintained its DCF guidance of $213 million to $233 million. It still estimates the adjusted EBITDA outlook within the $406-$426 million range.

Additionally, the firm still expects its net income for the year in the range of $33 million-$53 million.

Zacks Rank & Key Picks

USA Compression Partners currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include California Resources (CRC - Free Report) , Equinor (EQNR - Free Report) and BP (BP - 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 California Resources’ 2022 earnings has been revised about 10.6% upward over the past 60 days from $6.50 per share to $7.19.

The Zacks Consensus Estimate for CRC’s 2022 earnings is pegged at $7.19 per share, up 17.9% from the year-ago earnings of $6.10.

Equinor beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 7.3%.

The Zacks Consensus Estimate for EQNR’s 2022 earnings stands at $6.15 per share, up about 99.7% from the year-ago earnings of $3.08.

The Zacks Consensus Estimate for BP’s 2022 earnings is pegged at $7.89 per share, which is an increase of about 106.5% from the year-ago earnings of $3.82.

BP beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 15.5%.