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TC Energy (TRP) Up 5.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for TC Energy (TRP - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TC Energy due for a pullback? 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 catalysts.
TC Energy Q3 Earnings and Revenues Surpass Estimates
TC Energy reported third-quarter 2023 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 71 cents. This outperformance can be attributed to the company's Canadian Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines and United States Natural Gas Pipelines units' strong performance. The bottom line, however, decreased from 82 cents reported in the year-ago period due to a 26.8% year-over-year increase in expenses during the quarter.
TC Energy’s comparable EBITDA of C$2.63 billion was up from C$2.46 billion reported in the prior-year quarter.
Revenues of $2.93 billion beat the Zacks Consensus Estimate of $2.76 billion. The figure also increased 0.9% year over year.
TRP’s board of directors announced a quarterly dividend of 93 Canadian cents per common share for the quarter ending Dec 31, 2023. The dividend is payable on Jan 31, 2024, to shareholders of record at the close of business on Dec 29, 2023.
Segmental Information
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$781 million, up 9.5% from the year-ago quarter’s level. The figure also beat our projection of C$709.3 million.
The rise in EBITDA within Canadian Natural Gas Pipelines can be attributed mainly to increased flow-through costs on rate-regulated pipelines in Canada and higher earnings based on the rate base of NGTL System.
U.S. Natural Gas Pipelines reported a comparable EBITDA of C$968 million, indicating a 4.5% increase from the prior-year quarter’s recorded number. The figure also exceeded our anticipated figure of C$921.1 million.
The rise in U.S. dollar-denominated EBITDA from U.S. Natural Gas Pipelines stemmed from heightened net earnings resulting from new contracts in ANR and additional earnings generated by implemented growth projects.
Mexico Natural Gas Pipelines reported a comparable EBITDA of C$232 million, up 13.7% from the year-ago quarter’s figure of C$204 million. The figure also exceeded our prediction of C$194.5 million.
The rise in U.S. dollar-denominated EBITDA from Mexico Natural Gas Pipelines is primarily attributable to earnings generated by TGNH assets, which commenced commercial service in the third quarter of 2022. Additionally, the lateral section of the Villa de Reyes pipeline, placed in service in August 2023, contributed to this increase.
Liquids Pipelines' comparable EBITDA of C$398 million increased from the prior-year quarter’s level of C$332 million. The figure also exceeded our projection of C$351.5 million.
The growth in EBITDA within Liquids Pipelines is primarily a result of the foreign exchange impact of a stronger U.S. dollar affecting the translation of U.S. dollar-denominated operations. Additionally, increased long-haul contracted volumes and higher volumes on the U.S. Gulf Coast section of the Keystone Pipeline System contributed to this growth, partially offset by higher operating costs.
Power and Storage registered a comparable EBITDA of C$256 million, down 13.2% from the year-ago quarter’s level of C$295 million. The figure exceeded our projection of C$204.7 million.
Reduced EBITDA in Power and Energy Solutions was influenced by diminished earnings in Canadian Power, stemming from lower realized power prices and decreased contributions from marketing activities. This was partially mitigated by lower natural gas fuel costs. Bruce Power also experienced lower contributions, primarily due to decreased generation.
Expenditure and Balance Sheet
As of Sep 30, 2023, TC Energy’s capital investments amounted to C$2.29 billion.
TRP had cash and cash equivalents worth C$1.97 billion and long-term debt of C$52.7 billion, with a debt-to-capitalization of 63.7%.
Key Updates
TRP expects to spend C$12-C$12.5 billion on capital programs in 2023.
The company anticipates 2023 comparable EBITDA to be at the upper end of the 5-7% range. It expects 2023 comparable earnings per share to be broadly consistent with the prior-year level.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, TC Energy has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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, TC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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TC Energy (TRP) Up 5.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for TC Energy (TRP - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TC Energy due for a pullback? 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 catalysts.
TC Energy Q3 Earnings and Revenues Surpass Estimates
TC Energy reported third-quarter 2023 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 71 cents. This outperformance can be attributed to the company's Canadian Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines and United States Natural Gas Pipelines units' strong performance. The bottom line, however, decreased from 82 cents reported in the year-ago period due to a 26.8% year-over-year increase in expenses during the quarter.
TC Energy’s comparable EBITDA of C$2.63 billion was up from C$2.46 billion reported in the prior-year quarter.
Revenues of $2.93 billion beat the Zacks Consensus Estimate of $2.76 billion. The figure also increased 0.9% year over year.
TRP’s board of directors announced a quarterly dividend of 93 Canadian cents per common share for the quarter ending Dec 31, 2023. The dividend is payable on Jan 31, 2024, to shareholders of record at the close of business on Dec 29, 2023.
Segmental Information
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$781 million, up 9.5% from the year-ago quarter’s level. The figure also beat our projection of C$709.3 million.
The rise in EBITDA within Canadian Natural Gas Pipelines can be attributed mainly to increased flow-through costs on rate-regulated pipelines in Canada and higher earnings based on the rate base of NGTL System.
U.S. Natural Gas Pipelines reported a comparable EBITDA of C$968 million, indicating a 4.5% increase from the prior-year quarter’s recorded number. The figure also exceeded our anticipated figure of C$921.1 million.
The rise in U.S. dollar-denominated EBITDA from U.S. Natural Gas Pipelines stemmed from heightened net earnings resulting from new contracts in ANR and additional earnings generated by implemented growth projects.
Mexico Natural Gas Pipelines reported a comparable EBITDA of C$232 million, up 13.7% from the year-ago quarter’s figure of C$204 million. The figure also exceeded our prediction of C$194.5 million.
The rise in U.S. dollar-denominated EBITDA from Mexico Natural Gas Pipelines is primarily attributable to earnings generated by TGNH assets, which commenced commercial service in the third quarter of 2022. Additionally, the lateral section of the Villa de Reyes pipeline, placed in service in August 2023, contributed to this increase.
Liquids Pipelines' comparable EBITDA of C$398 million increased from the prior-year quarter’s level of C$332 million. The figure also exceeded our projection of C$351.5 million.
The growth in EBITDA within Liquids Pipelines is primarily a result of the foreign exchange impact of a stronger U.S. dollar affecting the translation of U.S. dollar-denominated operations. Additionally, increased long-haul contracted volumes and higher volumes on the U.S. Gulf Coast section of the Keystone Pipeline System contributed to this growth, partially offset by higher operating costs.
Power and Storage registered a comparable EBITDA of C$256 million, down 13.2% from the year-ago quarter’s level of C$295 million. The figure exceeded our projection of C$204.7 million.
Reduced EBITDA in Power and Energy Solutions was influenced by diminished earnings in Canadian Power, stemming from lower realized power prices and decreased contributions from marketing activities. This was partially mitigated by lower natural gas fuel costs. Bruce Power also experienced lower contributions, primarily due to decreased generation.
Expenditure and Balance Sheet
As of Sep 30, 2023, TC Energy’s capital investments amounted to C$2.29 billion.
TRP had cash and cash equivalents worth C$1.97 billion and long-term debt of C$52.7 billion, with a debt-to-capitalization of 63.7%.
Key Updates
TRP expects to spend C$12-C$12.5 billion on capital programs in 2023.
The company anticipates 2023 comparable EBITDA to be at the upper end of the 5-7% range. It expects 2023 comparable earnings per share to be broadly consistent with the prior-year level.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, TC Energy has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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, TC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.