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Why Is Crestwood Equity Partners LP (CEQP) Down 3.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Crestwood Equity Partners LP (CEQP - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Crestwood Equity Partners LP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Crestwood Q3 Earnings & Revenues Miss Estimates

The partnership reported third-quarter 2022 adjusted earnings of 10 cents per unit, missing the Zacks Consensus Estimate of 32 cents. The bottom line fared better than the year-ago adjusted loss of 29 cents per unit.

Total quarterly revenues surged to $1,566 million from $1,226 million in the prior-year quarter. The top line, however, missed the Zacks Consensus Estimate of $1,632 million.

Segmental Performance

Gathering and Processing North: The segment of Crestwood Equity generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $157.2 million, up from $106.4 million in the year-ago quarter. Operating and maintenance expenses increased to $27.4 million from $14.1 million.

Total gas gathering volumes in the quarter were 369.0 million cubic feet per day (MMcf/d), up from 241.2 MMcf/d a year ago. Gathering volumes increased in the Williston Basin and the Powder River Basin. Total processing volumes increased to 403.2 MMcf/d from the year-ago level of 228.9 MMcf/d.

Gathering and Processing South: The segment of Crestwood Equity incurred a loss of $47.3 million against a profit of $6.5 million in the year-ago quarter. Operating and maintenance expenses increased to $14.3 million from $5.4 million.

Total gas gathering volumes in the quarter were 715.1 MMcf/d, down from 734 MMcf/d a year ago. Gathering volumes declined in Marcellus, while the same rose in Delaware. Total processing volumes increased to 418.6 MMcf/d from the year-ago level of 180.5 MMcf/d.

Storage and Logistics: Crestwood Equity generated earnings of $16.9 million, turning around from a loss of $31.1 million in the year-ago quarter. Operating and maintenance expenses of $13.3 million increased from the year-ago quarter’s $12.1 million.

NGL volumes sold or processed in the third quarter were 112.8 MBbls/d, down from 151.2 MBbls/d in the year-ago period.

Expenses

Total operating expenses and others increased to $276.4 million from $140.6 million in the year-ago period.

General and administrative expenses jumped to $33.9 million in the September quarter from $25.9 million in third-quarter 2021. Also, operation and maintenance costs increased to $55 million from $31.6 million a year ago.

Cash Flow

Distributable cash flow attributable to CEQP common in the third quarter was $131 million, up from $85.8 million in the year-ago period.

Free cash flow after distributions was $3.4 million in the September quarter, down from $17.5 million in the year-ago period.

Balance Sheet

As of Sep 30, 2022, Crestwood Equity had $6.4 million in cash. Total debt was $3,570 million at the third-quarter end.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -15.27% due to these changes.

VGM Scores

At this time, Crestwood Equity Partners LP has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Crestwood Equity Partners LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Crestwood Equity Partners LP belongs to the Zacks Oil and Gas - Production Pipeline - MLB industry. Another stock from the same industry, Enterprise Products Partners (EPD - Free Report) , has gained 0.2% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Enterprise Products reported revenues of $15.47 billion in the last reported quarter, representing a year-over-year change of +42.8%. EPS of $0.63 for the same period compares with $0.52 a year ago.

For the current quarter, Enterprise Products is expected to post earnings of $0.60 per share, indicating a change of +15.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -3% over the last 30 days.

Enterprise Products has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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