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Enbridge Inc. (ENB - Free Report) shares have declined 3.7% after it reported first-quarter 2023 earnings on May 5. The downward stock movement can be attributed to the company’s elevated debt levels.
Enbridge recorded first-quarter adjusted earnings per share of 63 cents, beating the Zacks Consensus Estimate by a penny. However, the bottom line declined from the year-ago quarter’s 66 cents.
Total quarterly revenues of $8,930 million moved down from $11,919 million in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $10,328 million.
Better-than-expected quarterly earnings were primarily driven by higher contributions from the Liquids Pipelines segment. The positives were partially offset by lower contributions from the Renewable Power Generation segment.
Enbridge conducts business through five segments — Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.
Liquids Pipelines: The segment’s adjusted earnings before interest, income taxes, and depreciation and amortization (EBITDA) totaled C$2,354 million, up from C$2,217 million in the year-earlier quarter. Higher contributions from Mainline System, Gulf Coast and Mid-Continent primarily aided the segment.
Gas Transmission and Midstream: The segment’s adjusted earnings totaled C$1,189 million, up from C$1,058 million recorded in first-quarter 2022. Higher contributions from the U.S. Gas Transmission and Canadian Gas Transmission primarily aided the segment’s performance.
Gas Distribution and Storage: The unit generated a profit of C$716 million, up from C$674 million in the prior-year quarter due to increased contributions from Enbridge Gas Inc.
Renewable Power Generation: The segment recorded earnings of C$139 million, down from C$160 million in the prior-year quarter primarily due toweaker wind resources at Canada wind facilities and lower energy pricing at Europe offshore wind facilities.
Energy Services: The segment incurred a loss of C$6 million, narrower than a loss of C$71 million recorded in the first quarter of 2022.
Distributable Cash Flow (DCF)
In first-quarter 2023, Enbridge reported a DCF of C$3,180 million, representing an increase from C$3,072 million a year ago.
Balance Sheet
At the end of first-quarter 2023, the company reported long-term debt of C$71,740 million. It had cash and cash equivalents of C$976 million. The current portion of long-term debt was C$7,436 million. ENB’s long-term debt to capitalization was 53.7% at the end of the first quarter.
Guidance
For 2023, Enbridge reiterated its EBITDA guidance of C$15.9-C$16.5 billion. The metric indicates an increase from C$12 billion reported in 2022. The Zacks Rank #3 (Hold) company expects DCF per share of C$5.25-C$5.65 for the year, the mid-point of which suggests an increase from C$5.42 reported in 2022. 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.
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Enbridge (ENB) Shares Dip 3.7% Despite Q1 Earnings Beat
Enbridge Inc. (ENB - Free Report) shares have declined 3.7% after it reported first-quarter 2023 earnings on May 5. The downward stock movement can be attributed to the company’s elevated debt levels.
Enbridge recorded first-quarter adjusted earnings per share of 63 cents, beating the Zacks Consensus Estimate by a penny. However, the bottom line declined from the year-ago quarter’s 66 cents.
Total quarterly revenues of $8,930 million moved down from $11,919 million in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $10,328 million.
Better-than-expected quarterly earnings were primarily driven by higher contributions from the Liquids Pipelines segment. The positives were partially offset by lower contributions from the Renewable Power Generation segment.
Enbridge Inc Price, Consensus and EPS Surprise
Enbridge Inc price-consensus-eps-surprise-chart | Enbridge Inc Quote
Segmental Analysis
Enbridge conducts business through five segments — Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.
Liquids Pipelines: The segment’s adjusted earnings before interest, income taxes, and depreciation and amortization (EBITDA) totaled C$2,354 million, up from C$2,217 million in the year-earlier quarter. Higher contributions from Mainline System, Gulf Coast and Mid-Continent primarily aided the segment.
Gas Transmission and Midstream: The segment’s adjusted earnings totaled C$1,189 million, up from C$1,058 million recorded in first-quarter 2022. Higher contributions from the U.S. Gas Transmission and Canadian Gas Transmission primarily aided the segment’s performance.
Gas Distribution and Storage: The unit generated a profit of C$716 million, up from C$674 million in the prior-year quarter due to increased contributions from Enbridge Gas Inc.
Renewable Power Generation: The segment recorded earnings of C$139 million, down from C$160 million in the prior-year quarter primarily due toweaker wind resources at Canada wind facilities and lower energy pricing at Europe offshore wind facilities.
Energy Services: The segment incurred a loss of C$6 million, narrower than a loss of C$71 million recorded in the first quarter of 2022.
Distributable Cash Flow (DCF)
In first-quarter 2023, Enbridge reported a DCF of C$3,180 million, representing an increase from C$3,072 million a year ago.
Balance Sheet
At the end of first-quarter 2023, the company reported long-term debt of C$71,740 million. It had cash and cash equivalents of C$976 million. The current portion of long-term debt was C$7,436 million. ENB’s long-term debt to capitalization was 53.7% at the end of the first quarter.
Guidance
For 2023, Enbridge reiterated its EBITDA guidance of C$15.9-C$16.5 billion. The metric indicates an increase from C$12 billion reported in 2022. The Zacks Rank #3 (Hold) company expects DCF per share of C$5.25-C$5.65 for the year, the mid-point of which suggests an increase from C$5.42 reported in 2022. 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.