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USA Compression (USAC) Incurs Q4 Loss, Beats on Revenues
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USA Compression Partners, LP (USAC - Free Report) reported fourth-quarter 2022 net loss of 4 cents per common unit, lagging the Zacks Consensus Estimate of a profit of 6 cents per common unit. This was due to higher total costs and other expenses that were up 28.5% year over year.
However, the loss was narrower than the year-ago quarter’s loss of 9 cents per common unit. This favorable comparison was due to the partnership reporting a net income of $8.4 million in the fourth quarter of 2022, compared with $3.1 million for the year-ago period as pricing and utilization improved.
Revenues of $190.1 million were approximately 18.9% higher than the year-ago quarter’s recorded figure of $159.9 million. It beat the Zacks Consensus Estimate of $180 million.
Adjusted EBITDA increased to approximately $113 million, up about 14% from the year-ago quarter’s $99.2 million. The partnership’s distributable cash flow rose to $60.6 million from $52 million in the prior-year quarter.
The firm reported an operating cash flow of $82.1 million compared with $81.1 million in the prior-year quarter. However, its gross operating margin of 65.3% declined from the year-ago period’s 68.1%.
In the fourth quarter, USA Compression Partners’ revenue-generating horsepower capacity increased to 3,171,899 horsepower, up about 7.4% from the year-ago quarter’s level. Average monthly revenues were $17.81 per horsepower, higher than the year-ago quarter’s figure of $16.62.
USAC’s average quarterly horsepower utilization rate came in at 91.3%, higher than 82.9% in the year-ago period.
USA Compression Partners, LP Price, Consensus and EPS Surprise
USA Compression Partners’ distributable cash flow (DCF) available to limited partners for the fourth quarter equaled $60.6 million, up 16.4% from the year-ago level.
On Jan 12, 2023, the firm announced fourth-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis). The distribution was paid out on Feb 3, 2023, to common unitholders of record as of Jan 23, 2023.
It spent $46.1 million on growth capex. The partnership’s maintenance capex amounted to $3.7 million.
As of Dec 31, 2022, USA Compression Partners had net long-term debt of about $2.1 billion.
Guidance
For 2023, USAC anticipates distributable cash flow in the $260-$280 million range. The partnership also expects adjusted EBITDA in the $490-510 million range.
The company now anticipates 2023 net income in the $75-$95 million range.
USA Compression Partners is confident in long-term demand for natural gas and plans to pursue growth opportunities in the oil and gas industry. The company aims to expand its compression unit fleet and optimize operations for increased profitability. However, the company acknowledges the potential risks and uncertainties of the industry, including commodity price fluctuations, regulatory changes, and competition.
Zacks Rank and Key Picks
Currently, USA Compression Partners carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-ranking stocks like ProPetro Holding (PUMP - Free Report) sporting a Zacks Rank #1 (Strong Buy) and Energy Transfer (ET - Free Report) and Helmerich & Payne (HP - Free Report) bothholding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ProPetro Holding: PUMP currently has a forward P/E ratio of 4.20. In comparison, its industry has an average forward P/E of 23.50, which means PUMP is trading at a discount to the group.
ProPetro Holding is worth approximately $1.07 billion. Its shares have declined 19.9% in the past year.
Energy Transfer LP: Energy Transfer LP is valued at around $39.75 billion. ET delivered an average earnings surprise of 11.43% for the last four quarters, and its current dividend yield is 9.48%.
Energy Transfer LP currently has a forward P/E ratio of 8.94. In comparison, its industry has an average forward P/E of 14.40, which means Energy Transfer LP is trading at a discount to the group.
Helmerich & Payne: Helmerich & Payne is valued at around $4.78 billion. Helmerich & Payne, headquartered in Tulsa, OK, has a trailing four-quarter earnings surprise of roughly 130.98% on average.
Over the past 60 days, the Zacks Consensus Estimate for HP's fiscal 2023 earnings has been revised by 18.8%. In the past year, HP stock has increased by 34.7%.
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USA Compression (USAC) Incurs Q4 Loss, Beats on Revenues
USA Compression Partners, LP (USAC - Free Report) reported fourth-quarter 2022 net loss of 4 cents per common unit, lagging the Zacks Consensus Estimate of a profit of 6 cents per common unit. This was due to higher total costs and other expenses that were up 28.5% year over year.
However, the loss was narrower than the year-ago quarter’s loss of 9 cents per common unit. This favorable comparison was due to the partnership reporting a net income of $8.4 million in the fourth quarter of 2022, compared with $3.1 million for the year-ago period as pricing and utilization improved.
Revenues of $190.1 million were approximately 18.9% higher than the year-ago quarter’s recorded figure of $159.9 million. It beat the Zacks Consensus Estimate of $180 million.
Adjusted EBITDA increased to approximately $113 million, up about 14% from the year-ago quarter’s $99.2 million. The partnership’s distributable cash flow rose to $60.6 million from $52 million in the prior-year quarter.
The firm reported an operating cash flow of $82.1 million compared with $81.1 million in the prior-year quarter. However, its gross operating margin of 65.3% declined from the year-ago period’s 68.1%.
In the fourth quarter, USA Compression Partners’ revenue-generating horsepower capacity increased to 3,171,899 horsepower, up about 7.4% from the year-ago quarter’s level. Average monthly revenues were $17.81 per horsepower, higher than the year-ago quarter’s figure of $16.62.
USAC’s average quarterly horsepower utilization rate came in at 91.3%, higher than 82.9% in the year-ago period.
USA Compression Partners, LP Price, Consensus and EPS Surprise
USA Compression Partners, LP price-consensus-eps-surprise-chart | USA Compression Partners, LP Quote
DCF, Capex & Balance Sheet
USA Compression Partners’ distributable cash flow (DCF) available to limited partners for the fourth quarter equaled $60.6 million, up 16.4% from the year-ago level.
On Jan 12, 2023, the firm announced fourth-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis). The distribution was paid out on Feb 3, 2023, to common unitholders of record as of Jan 23, 2023.
It spent $46.1 million on growth capex. The partnership’s maintenance capex amounted to $3.7 million.
As of Dec 31, 2022, USA Compression Partners had net long-term debt of about $2.1 billion.
Guidance
For 2023, USAC anticipates distributable cash flow in the $260-$280 million range. The partnership also expects adjusted EBITDA in the $490-510 million range.
The company now anticipates 2023 net income in the $75-$95 million range.
USA Compression Partners is confident in long-term demand for natural gas and plans to pursue growth opportunities in the oil and gas industry. The company aims to expand its compression unit fleet and optimize operations for increased profitability. However, the company acknowledges the potential risks and uncertainties of the industry, including commodity price fluctuations, regulatory changes, and competition.
Zacks Rank and Key Picks
Currently, USA Compression Partners carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-ranking stocks like ProPetro Holding (PUMP - Free Report) sporting a Zacks Rank #1 (Strong Buy) and Energy Transfer (ET - Free Report) and Helmerich & Payne (HP - Free Report) bothholding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ProPetro Holding: PUMP currently has a forward P/E ratio of 4.20. In comparison, its industry has an average forward P/E of 23.50, which means PUMP is trading at a discount to the group.
ProPetro Holding is worth approximately $1.07 billion. Its shares have declined 19.9% in the past year.
Energy Transfer LP: Energy Transfer LP is valued at around $39.75 billion. ET delivered an average earnings surprise of 11.43% for the last four quarters, and its current dividend yield is 9.48%.
Energy Transfer LP currently has a forward P/E ratio of 8.94. In comparison, its industry has an average forward P/E of 14.40, which means Energy Transfer LP is trading at a discount to the group.
Helmerich & Payne: Helmerich & Payne is valued at around $4.78 billion. Helmerich & Payne, headquartered in Tulsa, OK, has a trailing four-quarter earnings surprise of roughly 130.98% on average.
Over the past 60 days, the Zacks Consensus Estimate for HP's fiscal 2023 earnings has been revised by 18.8%. In the past year, HP stock has increased by 34.7%.