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Magellan Midstream Partners reported second-quarter 2023 adjusted net income of $1.23 per unit, which beat the Zacks Consensus Estimate of $1.10. The outperformance could be attributed to higher profit from its Refined Products segment in the reported quarter. The bottom line also surpassed the year-ago quarter’s level of $1.13 due to weaker performance from the Crude Oil segment.
Revenues of $877.2 million increased about 11.2% from the year-ago quarter’s level and beat the Zacks Consensus Estimate of $798 million by 9.9%. This outperformance was due to higher revenues from terminals and transportation as well as increased product sales.
Magellan Midstream Partners, L.P. Price, Consensus and EPS Surprise
Refined Products: The operating margin of this segment totaled $233.6 million compared with $166.5 million in the year-ago period. The figure, however, fell short of our projection of $273.1 million. Transportation and terminal revenues increased 11.7% to $389.9 million due to higher average transportation rates.
Crude Oil: This segment’s operating margin of $61.4 million decreased 16.5% from the year-ago quarter’s level of $73.5 million. This was due to new lower rates as well as lower storage revenues in the reported quarter. The reported figure also missed our prediction of $84.2 million.
Distributable Cash Flow and Cost
Magellan’s discounted cash flow (DCF) for the second quarter increased 36.8% year over year to $311.9 million. Total costs and expenses were $597.6 million, up 3.4% from $578.1 million in the comparable period of 2022.
On Jun 27, the company announced a quarterly cash distribution of $1.0475 per unit or $4.19 on an annualized basis. The amount was paid on Aug 14 to its unitholders of record as of Aug 7.
CVR Energy (CVI - Free Report) is valued at around $3.67 billion. In the past year, its shares have risen 19.5%
CVI currently pays a dividend of $2 per share, or 5.47% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Evolution Petroleum is worth approximately $320.71 million. EPM currently pays a dividend of 48 cents per share, or 4.98% on an annual basis.
The company currently has a forward P/E ratio of 8.93. In comparison, its industry has an average forward P/E of 14.60, which means EPM is trading at a discount to the group.
Archrock is valued at around $2.04 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 4.75%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.
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Magellan (MMP) Q2 Earnings & Revenues Outpace Estimates
Magellan Midstream Partners reported second-quarter 2023 adjusted net income of $1.23 per unit, which beat the Zacks Consensus Estimate of $1.10. The outperformance could be attributed to higher profit from its Refined Products segment in the reported quarter. The bottom line also surpassed the year-ago quarter’s level of $1.13 due to weaker performance from the Crude Oil segment.
Revenues of $877.2 million increased about 11.2% from the year-ago quarter’s level and beat the Zacks Consensus Estimate of $798 million by 9.9%. This outperformance was due to higher revenues from terminals and transportation as well as increased product sales.
Magellan Midstream Partners, L.P. Price, Consensus and EPS Surprise
Magellan Midstream Partners, L.P. price-consensus-eps-surprise-chart | Magellan Midstream Partners, L.P. Quote
Operational Performance
Refined Products: The operating margin of this segment totaled $233.6 million compared with $166.5 million in the year-ago period. The figure, however, fell short of our projection of $273.1 million. Transportation and terminal revenues increased 11.7% to $389.9 million due to higher average transportation rates.
Crude Oil: This segment’s operating margin of $61.4 million decreased 16.5% from the year-ago quarter’s level of $73.5 million. This was due to new lower rates as well as lower storage revenues in the reported quarter. The reported figure also missed our prediction of $84.2 million.
Distributable Cash Flow and Cost
Magellan’s discounted cash flow (DCF) for the second quarter increased 36.8% year over year to $311.9 million. Total costs and expenses were $597.6 million, up 3.4% from $578.1 million in the comparable period of 2022.
On Jun 27, the company announced a quarterly cash distribution of $1.0475 per unit or $4.19 on an annualized basis. The amount was paid on Aug 14 to its unitholders of record as of Aug 7.
Guidance
MMP expects DCF of $1.26 billion for 2023.
Zacks Rank and Key Picks
Currently, MMP carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are CVR Energy (CVI - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Evolution Petroleum (EPM - Free Report) and Archrock (AROC - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy (CVI - Free Report) is valued at around $3.67 billion. In the past year, its shares have risen 19.5%
CVI currently pays a dividend of $2 per share, or 5.47% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Evolution Petroleum is worth approximately $320.71 million. EPM currently pays a dividend of 48 cents per share, or 4.98% on an annual basis.
The company currently has a forward P/E ratio of 8.93. In comparison, its industry has an average forward P/E of 14.60, which means EPM is trading at a discount to the group.
Archrock is valued at around $2.04 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 4.75%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.