A month has gone by since the last earnings report for Crestwood Equity Partners LP . Shares have lost about 7.2% 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 the most recent earnings report in order to get a better handle on the important drivers.
Crestwood Q4 Earnings Beat Estimates
Crestwood reported fourth-quarter 2022 adjusted earnings of 26 cents per unit, beating the Zacks Consensus Estimate of 20 cents. However, the bottom line declined from the year-ago quarter’s 79 cents per unit.
Total quarterly revenues surged to $1,403 million from $1,380 million in the prior-year quarter. The top line missed the Zacks Consensus Estimate of $1,538 million.
Better-than-expected quarterly earnings were primarily driven by higher gas gathering and processing volumes. The positives were partially offset by higher operating expenses.
Segmental Performance
Gathering and Processing North: The segment of Crestwood generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $140.8 million, up from $116.5 million in the year-ago quarter. Operating and maintenance expenses increased to $26.7 million from $12.9 million.
Total gas gathering volumes in the quarter were 349.0 million cubic feet per day (MMcf/d), up from 243.7 MMcf/d a year ago. Gathering volumes increased in the Williston Basin and the Powder River Basin. Total processing volumes increased to 378.9 MMcf/d from the year-ago level of 231.4 MMcf/d.
Gathering and Processing South: The segment of Crestwood generated earnings of $44 million, up from the $8.8 million reported in the year-ago quarter. Operating and maintenance expenses increased to $14.4 million from $5.5 million.
Total gas gathering volumes in the quarter were 707.5 MMcf/d, up from 700.1 MMcf/d a year ago. Gathering volumes declined in Marcellus, while the same rose in the Delaware Basin. Total processing volumes increased to 408.4 MMcf/d from the year-ago level of 188.6 MMcf/d.
Storage and Logistics: Crestwood generated earnings of $35.7 million, declining from the $76.3 million in the year-ago quarter. Operating and maintenance expenses of $11 million declined from the year-ago quarter’s $12.4 million.
Expenses
Total operating expenses and others increased to $166.1 million from $142.6 million in the year-ago period.
Operation and maintenance costs increased to $52.1 million from $30.8 million a year ago. However, general and administrative expenses declined to $26.6 million in the December-end quarter from $30.2 million in fourth-quarter 2021.
Cash Flow
Distributable cash flow attributable to CEQP common in the fourth quarter was $110.8 million, up from $91.1 million in the year-ago period.
Free cash flow after distributions was $23.8 million deficit in the December-end quarter, against the $32.8 million reported in the year-ago period.
Balance Sheet
As of Dec 31, 2022, Crestwood had $7.5 million in cash. Total debt was $3,378.3 million at the fourth-quarter end.
Outlook
For 2023, Crestwood expects adjusted EBITDA of $780-$860 million, suggesting an improvement from the $762.1 million reported in 2022. The partnership expects a free cash flow after paying distributions of $10-$90 million.
The company expects capital spending related to growth projects of $135-$155 million for the year. Maintenance capital spending is anticipated to be $25-$30 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -45.4% due to these changes.
VGM Scores
Currently, Crestwood Equity Partners LP has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, 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 C. 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.
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Why Is Crestwood Equity Partners LP (CEQP) Down 7.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Crestwood Equity Partners LP . Shares have lost about 7.2% 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 the most recent earnings report in order to get a better handle on the important drivers.
Crestwood Q4 Earnings Beat Estimates
Crestwood reported fourth-quarter 2022 adjusted earnings of 26 cents per unit, beating the Zacks Consensus Estimate of 20 cents. However, the bottom line declined from the year-ago quarter’s 79 cents per unit.
Total quarterly revenues surged to $1,403 million from $1,380 million in the prior-year quarter. The top line missed the Zacks Consensus Estimate of $1,538 million.
Better-than-expected quarterly earnings were primarily driven by higher gas gathering and processing volumes. The positives were partially offset by higher operating expenses.
Segmental Performance
Gathering and Processing North: The segment of Crestwood generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $140.8 million, up from $116.5 million in the year-ago quarter. Operating and maintenance expenses increased to $26.7 million from $12.9 million.
Total gas gathering volumes in the quarter were 349.0 million cubic feet per day (MMcf/d), up from 243.7 MMcf/d a year ago. Gathering volumes increased in the Williston Basin and the Powder River Basin. Total processing volumes increased to 378.9 MMcf/d from the year-ago level of 231.4 MMcf/d.
Gathering and Processing South: The segment of Crestwood generated earnings of $44 million, up from the $8.8 million reported in the year-ago quarter. Operating and maintenance expenses increased to $14.4 million from $5.5 million.
Total gas gathering volumes in the quarter were 707.5 MMcf/d, up from 700.1 MMcf/d a year ago. Gathering volumes declined in Marcellus, while the same rose in the Delaware Basin. Total processing volumes increased to 408.4 MMcf/d from the year-ago level of 188.6 MMcf/d.
Storage and Logistics: Crestwood generated earnings of $35.7 million, declining from the $76.3 million in the year-ago quarter. Operating and maintenance expenses of $11 million declined from the year-ago quarter’s $12.4 million.
Expenses
Total operating expenses and others increased to $166.1 million from $142.6 million in the year-ago period.
Operation and maintenance costs increased to $52.1 million from $30.8 million a year ago. However, general and administrative expenses declined to $26.6 million in the December-end quarter from $30.2 million in fourth-quarter 2021.
Cash Flow
Distributable cash flow attributable to CEQP common in the fourth quarter was $110.8 million, up from $91.1 million in the year-ago period.
Free cash flow after distributions was $23.8 million deficit in the December-end quarter, against the $32.8 million reported in the year-ago period.
Balance Sheet
As of Dec 31, 2022, Crestwood had $7.5 million in cash. Total debt was $3,378.3 million at the fourth-quarter end.
Outlook
For 2023, Crestwood expects adjusted EBITDA of $780-$860 million, suggesting an improvement from the $762.1 million reported in 2022. The partnership expects a free cash flow after paying distributions of $10-$90 million.
The company expects capital spending related to growth projects of $135-$155 million for the year. Maintenance capital spending is anticipated to be $25-$30 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -45.4% due to these changes.
VGM Scores
Currently, Crestwood Equity Partners LP has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, 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 C. 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.