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Enbridge Inc. (ENB - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 47 cents, which missed the Zacks Consensus Estimate of 50 cents. However, the bottom line increased from the year-ago quarter’s 46 cents.
Total quarterly revenues of $8.4 billion decreased from $9.9 billion in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $9.6 billion.
Lower-than-expected quarterly earnings resulted from reduced contributions from the U.S. Gas Transmission and Midstream segments. This downside was somewhat mitigated by increased contributions from the Liquids Pipelines segment.
For 2024, Enbridge announced a 3.1% hike in its quarterly dividend, raising it to 91.50 cents per share ($3.66 annually). The increased dividend will be paid out on Mar 1, 2024, to shareholders of record as of Feb 15, 2024.
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$2.4 billion, up from C$2.3 billion in the year-earlier quarter. Higher contributions from Gulf Coast and Mid-Continent systems primarily aided the segment.
Gas Transmission and Midstream: Adjusted earnings at this segment totaled C$1.08 billion, down from C$1.12 billion recorded in fourth-quarter 2022. Lower contributions from the Midstream segment primarily hurt its performance.
Gas Distribution and Storage: The unit generated a profit of C$519 million, up from C$467 million in the prior-year quarter due to increased contributions from Enbridge Gas Inc.
Renewable Power Generation: The segment recorded earnings of C$141 million, up from C$122 million in the prior-year quarter.
Energy Services: The segment incurred a loss of C$27 million, narrower than a reported loss of C$62 million in the fourth quarter of 2022.
Distributable Cash Flow (DCF)
In fourth-quarter 2023, Enbridge reported a DCF of C$2.73 billion, up from the C$2.66 billion recorded a year ago.
Balance Sheet
At the end of the fourth quarter, ENB reported long-term debt of C$81.2 billion. It had cash and cash equivalents of C$5.9 billion. The current portion of long-term debt was C$6.1 billion.
Outlook
For 2024, the company reiterated its adjusted EBITDA guidance on base business of $16.6-$17.2 billion and DCF per share of $5.40 to $5.80.
Growth in 2024 is anticipated to be driven by contributions from recent acquisitions, assets placed into service and toll escalators, partially offset by lower Mainline tolls, higher financing costs and higher current income taxes.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS has moved north in the past 30 days to 91 cents. SUBCY’s 2024 earnings are expected to soar 277% from the prior-year levels.
Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
The Zacks Consensus Estimate for EGY’s 2024 EPS has moved north in the past 60 days to $1.49. EGY’s earnings for 2024 are expected to surge 325.7% from the year-ago actuals.
Energy Transfer (ET - Free Report) is a publicly traded limited partnership focused on diverse energy assets in the United States. Its core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.
The Zacks Consensus Estimate for ET’s 2024 EPS has moved north in the past 30 days to $1.22. ET’s earnings for 2024 are expected to rise 18% from the year-earlier figures.
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Enbridge (ENB) Misses Q4 Earnings Estimates, Hikes Dividend
Enbridge Inc. (ENB - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 47 cents, which missed the Zacks Consensus Estimate of 50 cents. However, the bottom line increased from the year-ago quarter’s 46 cents.
Total quarterly revenues of $8.4 billion decreased from $9.9 billion in the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $9.6 billion.
Lower-than-expected quarterly earnings resulted from reduced contributions from the U.S. Gas Transmission and Midstream segments. This downside was somewhat mitigated by increased contributions from the Liquids Pipelines segment.
Enbridge Inc Price, Consensus and EPS Surprise
Enbridge Inc price-consensus-eps-surprise-chart | Enbridge Inc Quote
Dividend Hike
For 2024, Enbridge announced a 3.1% hike in its quarterly dividend, raising it to 91.50 cents per share ($3.66 annually). The increased dividend will be paid out on Mar 1, 2024, to shareholders of record as of Feb 15, 2024.
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$2.4 billion, up from C$2.3 billion in the year-earlier quarter. Higher contributions from Gulf Coast and Mid-Continent systems primarily aided the segment.
Gas Transmission and Midstream: Adjusted earnings at this segment totaled C$1.08 billion, down from C$1.12 billion recorded in fourth-quarter 2022. Lower contributions from the Midstream segment primarily hurt its performance.
Gas Distribution and Storage: The unit generated a profit of C$519 million, up from C$467 million in the prior-year quarter due to increased contributions from Enbridge Gas Inc.
Renewable Power Generation: The segment recorded earnings of C$141 million, up from C$122 million in the prior-year quarter.
Energy Services: The segment incurred a loss of C$27 million, narrower than a reported loss of C$62 million in the fourth quarter of 2022.
Distributable Cash Flow (DCF)
In fourth-quarter 2023, Enbridge reported a DCF of C$2.73 billion, up from the C$2.66 billion recorded a year ago.
Balance Sheet
At the end of the fourth quarter, ENB reported long-term debt of C$81.2 billion. It had cash and cash equivalents of C$5.9 billion. The current portion of long-term debt was C$6.1 billion.
Outlook
For 2024, the company reiterated its adjusted EBITDA guidance on base business of $16.6-$17.2 billion and DCF per share of $5.40 to $5.80.
Growth in 2024 is anticipated to be driven by contributions from recent acquisitions, assets placed into service and toll escalators, partially offset by lower Mainline tolls, higher financing costs and higher current income taxes.
Zacks Rank & Stocks to Consider
Currently, ENB carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies, each presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS has moved north in the past 30 days to 91 cents. SUBCY’s 2024 earnings are expected to soar 277% from the prior-year levels.
Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
The Zacks Consensus Estimate for EGY’s 2024 EPS has moved north in the past 60 days to $1.49. EGY’s earnings for 2024 are expected to surge 325.7% from the year-ago actuals.
Energy Transfer (ET - Free Report) is a publicly traded limited partnership focused on diverse energy assets in the United States. Its core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.
The Zacks Consensus Estimate for ET’s 2024 EPS has moved north in the past 30 days to $1.22. ET’s earnings for 2024 are expected to rise 18% from the year-earlier figures.