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Enterprise (EPD) Units Dips 1.1% Despite Q1 Earnings Beat
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Enterprise Products Partners LP (EPD - Free Report) shares have declined 1.1% since it reported first-quarter 2023 earnings on May 2. The downward price movement can be primarily attributed to the partnership’s aggressive capital expenditure plans.
Enterprise reported first-quarter 2023 adjusted earnings per limited partner unit of 64 cents, beating the Zacks Consensus Estimate of 62 cents. The bottom line improved from the year-ago quarter’s 60 cents.
Total quarterly revenues of $12,444 million missed the Zacks Consensus Estimate of $14,063 million. The top line also declined from the $13,008 million reported in the prior-year quarter.
Strong quarterly earnings were primarily driven by higher contributions from the Natural Gas Pipelines & Services businesses.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Pipeline volumes in NGL, crude oil, refined products and petrochemicals were 7.1 million barrels per day (bpd), higher than the year-ago quarter’s 6.5 million bpd. Natural gas pipeline volumes were 18 trillion British thermal units per day (TBtus/d), up from 16.4 TBtus/d a year ago. Also, marine terminal volumes increased to 2 million bpd from 1.6 million bpd.
Gross operating income at NGL Pipelines & Services declined from $1,225 million in the year-ago quarter to $1,212 million primarily due to lower average sales margins and declining sales volumes.
Natural Gas Pipelines and Services’ gross operating income increased to $314 million from $220 million in the year-ago quarter. The upside was due to an increase in natural gas pipeline transportation volumes.
Crude Oil Pipelines & Services recorded a gross operating income of $397 million, which decreased from $415 million in the prior-year quarter.
Gross operating income at Petrochemical & Refined Products Services amounted to $419 million compared with $404 million a year ago primarily due to higher pipeline transportation volumes and marine terminal volumes.
Cash Flow
The adjusted distributable cash flow was $1,938 million, up from $1,837 million a year ago. The same provided coverage of 1.8X. The partnership retained $863 million of distributable cash flow in the March-end quarter. It generated an adjusted free cash flow of $1,347 million against a negative $1,618 million in the year-ago quarter.
Financials
For first-quarter 2023, Enterprise’s total capital investment was $654 million.
As of Mar 31, 2023, its outstanding total debt principal was $28.9 billion. Enterprise’s consolidated liquidity amounted to $4 billion. The total liquidity amount included unrestricted cash on hand and available borrowing capacity under its revolving credit facility.
Outlook
For 2023, Enterprise expects growth capital investments of $2.4-$2.8 billion, indicating an increase from the prior mentioned $2.3-$2.5 billion. Sustaining capital expenditure is projected to be $400 million.
A Glimpse of Other Midstream Companies’ Q1 Earnings
Kinder Morgan, Inc. (KMI - Free Report) reported first-quarter 2023 adjusted earnings per share of 30 cents, beating the Zacks Consensus Estimate by a penny. Better-than-expected quarterly earnings were primarily aided by higher gathering and transport volumes.
For 2023, KMI projects a net income attributable to the midstream player of $2.5 billion. For this year, it expects a dividend of $1.13 per share, suggesting an increase of 2% from the prior-year reported figure.
Crestwood Equity Partners LP reported first-quarter adjusted earnings of 15 cents per unit, in line with the Zacks Consensus Estimate. The bottom line reversed from the year-ago quarter’s loss of 4 cents per unit.
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.
Antero Midstream Corporation (AM - Free Report) reported first-quarter 2023 adjusted earnings per share of 21 cents, beating the Zacks Consensus Estimate of 19 cents. Strong quarterly results were primarily driven by higher freshwater delivery volumes and increased average freshwater distribution fees.
For 2023, Antero Midstream expects a net income of $355-$395 million, indicating an increase from the $326.2 million reported in 2022. The midstream operator anticipates a free cash flow before dividends of $550-$590 million.
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Enterprise (EPD) Units Dips 1.1% Despite Q1 Earnings Beat
Enterprise Products Partners LP (EPD - Free Report) shares have declined 1.1% since it reported first-quarter 2023 earnings on May 2. The downward price movement can be primarily attributed to the partnership’s aggressive capital expenditure plans.
Enterprise reported first-quarter 2023 adjusted earnings per limited partner unit of 64 cents, beating the Zacks Consensus Estimate of 62 cents. The bottom line improved from the year-ago quarter’s 60 cents.
Total quarterly revenues of $12,444 million missed the Zacks Consensus Estimate of $14,063 million. The top line also declined from the $13,008 million reported in the prior-year quarter.
Strong quarterly earnings were primarily driven by higher contributions from the Natural Gas Pipelines & Services businesses.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Enterprise Products Partners L.P. price-consensus-eps-surprise-chart | Enterprise Products Partners L.P. Quote
Segmental Performance
Pipeline volumes in NGL, crude oil, refined products and petrochemicals were 7.1 million barrels per day (bpd), higher than the year-ago quarter’s 6.5 million bpd. Natural gas pipeline volumes were 18 trillion British thermal units per day (TBtus/d), up from 16.4 TBtus/d a year ago. Also, marine terminal volumes increased to 2 million bpd from 1.6 million bpd.
Gross operating income at NGL Pipelines & Services declined from $1,225 million in the year-ago quarter to $1,212 million primarily due to lower average sales margins and declining sales volumes.
Natural Gas Pipelines and Services’ gross operating income increased to $314 million from $220 million in the year-ago quarter. The upside was due to an increase in natural gas pipeline transportation volumes.
Crude Oil Pipelines & Services recorded a gross operating income of $397 million, which decreased from $415 million in the prior-year quarter.
Gross operating income at Petrochemical & Refined Products Services amounted to $419 million compared with $404 million a year ago primarily due to higher pipeline transportation volumes and marine terminal volumes.
Cash Flow
The adjusted distributable cash flow was $1,938 million, up from $1,837 million a year ago. The same provided coverage of 1.8X. The partnership retained $863 million of distributable cash flow in the March-end quarter. It generated an adjusted free cash flow of $1,347 million against a negative $1,618 million in the year-ago quarter.
Financials
For first-quarter 2023, Enterprise’s total capital investment was $654 million.
As of Mar 31, 2023, its outstanding total debt principal was $28.9 billion. Enterprise’s consolidated liquidity amounted to $4 billion. The total liquidity amount included unrestricted cash on hand and available borrowing capacity under its revolving credit facility.
Outlook
For 2023, Enterprise expects growth capital investments of $2.4-$2.8 billion, indicating an increase from the prior mentioned $2.3-$2.5 billion. Sustaining capital expenditure is projected to be $400 million.
Zacks Rank
Enterprise currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Glimpse of Other Midstream Companies’ Q1 Earnings
Kinder Morgan, Inc. (KMI - Free Report) reported first-quarter 2023 adjusted earnings per share of 30 cents, beating the Zacks Consensus Estimate by a penny. Better-than-expected quarterly earnings were primarily aided by higher gathering and transport volumes.
For 2023, KMI projects a net income attributable to the midstream player of $2.5 billion. For this year, it expects a dividend of $1.13 per share, suggesting an increase of 2% from the prior-year reported figure.
Crestwood Equity Partners LP reported first-quarter adjusted earnings of 15 cents per unit, in line with the Zacks Consensus Estimate. The bottom line reversed from the year-ago quarter’s loss of 4 cents per unit.
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.
Antero Midstream Corporation (AM - Free Report) reported first-quarter 2023 adjusted earnings per share of 21 cents, beating the Zacks Consensus Estimate of 19 cents. Strong quarterly results were primarily driven by higher freshwater delivery volumes and increased average freshwater distribution fees.
For 2023, Antero Midstream expects a net income of $355-$395 million, indicating an increase from the $326.2 million reported in 2022. The midstream operator anticipates a free cash flow before dividends of $550-$590 million.