A month has gone by since the last earnings report for Antero Midstream Corporation (AM Quick QuoteAM - Free Report) . Shares have added about 6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Antero Midstream Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Antero Midstream Q3 Earnings Top on Gathering Volumes

Antero Midstream Corporation reported third-quarter 2023 adjusted earnings per share of 23 cents, which beat the Zacks Consensus Estimate of 21 cents. The bottom line also improved from the year-ago quarter’s level of 20 cents.

Total quarterly revenues of $264 million surpassed the Zacks Consensus Estimate of $256 million. The top line also increased from $231 million recorded in the year-ago quarter.

Such strong quarterly results were primarily driven by higher compression, gathering and freshwater delivery volumes, and increased average freshwater distribution fees.

Operational Performance

In the third quarter, average daily compression volumes were 3,271 million cubic feet (MMcf/d) compared with 2,794 MMcf/d in the year-ago period. The reported figure was also higher than our estimate of 2,961 MMcf/d. On a per-Mcf basis, the compression fee was 21 cents, in line with the prior-year quarter’s number.

High-pressure gathering volumes totaled 2,935 MMcf/d, up from the year-ago period’s level of 2,802 MMcf/d. The figure was also higher than our estimate of 2,753 MMcf/d. On a per-Mcf basis, the average gathering high-pressure fee was 21 cents, in line with the year-ago quarter’s level.

Low-pressure gathering volumes averaged 3,323 MMcf/d compared with 2,952 MMcf/d in the third quarter of 2022.  The figure was also higher than our estimate of 3,046 MMcf/d. On a per-Mcf basis, the average gathering low-pressure fee was 35 cents, higher than the prior-year quarter’s level of 34 cents. The reported figure was in line with our estimate.

Freshwater delivery volumes were registered at 106 MBbls/d, up 3% from the prior-year quarter’s level of 103 MBbls/d. On a per-barrel basis, the average freshwater distribution fee was $4.20 compared with $4.04 in the year-ago period. The figure was also higher than our estimate of $4.05.

Operating Expenses

Direct operating expenses amounted to $51.9 million, up from $46.6 million recorded a year ago.

Antero Midstream’s total operating expenses were $101.5 million, up from $93.3 million recorded in the corresponding period of 2022.

Balance Sheet

As of Sep 30, the company had no cash and cash equivalents. As of the same date, the company had $3,258.5 million of long-term debt.

Outlook

For 2023, Antero Midstream increased its adjusted EBITDA projection to the range of $970-$990 million, indicating an increase of $10 million at the mid-point of the prior guidance. The company increased free cash flow after dividends to a range of $135-$155 million. The midstream operator looks forward to leverage a target of 3.0x or less in 2024.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 6% due to these changes.

VGM Scores

Currently, Antero Midstream Corporation has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Antero Midstream Corporation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.