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Antero Midstream (AM) Q4 Earnings Beat on Compression Volumes
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Antero Midstream Corporation (AM - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 24 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 $260 million surpassed the Zacks Consensus Estimate of $249 million. The top line also increased from $242 million recorded in the year-ago quarter.
Such strong quarterly results were primarily driven by higher compression and increased low pressure gathering volumes.
Antero Midstream Corporation Price, Consensus and EPS Surprise
In the fourth quarter, average daily compression volumes were 3,343 million cubic feet (MMcf/d) compared with 2,945 MMcf/d in the year-ago period. The reported figure was also higher than our estimate of 3,126 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 3,047 MMcf/d, up from the year-ago period’s level of 2,762 MMcf/d. The figure was also higher than our estimate of 2,767 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 3,377 MMcf/d compared with 3,070 MMcf/d in the fourth quarter of 2022. The figure was also higher than our estimate of 3,207 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 94 MBbls/d, down approximately 15% from the prior-year quarter’s level of 111 MBbls/d. On a per-barrel basis, the average freshwater distribution fee was $4.22 compared with $4.09 in the year-ago period. The figure was also higher than our estimate of $4.10.
Operating Expenses
Direct operating expenses amounted to $50.8 million, up from $48.3 million recorded a year ago.
Antero Midstream’s total operating expenses came in at $104.5 million, up from $97.4 million recorded in the corresponding period of 2022.
Balance Sheet
As of Dec 31, the company had cash and cash equivalents of $66,000. As of the same date, the company had $3,213.2 million of long-term debt.
Outlook
For 2024, Antero Midstream expects adjusted EBITDA to be in the range of $1,020-$1,060 million, indicating a 5% increase from the 2023 level at the midpoint. The company projects Free Cash Flows after dividends in the range of $235-$275 million for 2024. The capital budget for 2024 is expected to be in the band of $150-$170 million, indicating a 14% decrease from the 2023 level at the midpoint.
Zacks Rank and Key Picks
Currently, AM holds a Zacks Rank #3 (Hold).
Investors might want to look at some better-ranked stocks in the energy sector, such as Oceaneering International (OII - Free Report) , Energy Transfer LP (ET - Free Report) and Harbour Energy (HBRIY - Free Report) . While both Oceaneering International and Energy Transfer currently sport a Zacks Rank #1 (Strong Buy), Harbour Energy holds a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International is a market-leading supplier of offshore equipment and technology solutions to the energy industry. The company has projected an increase in free cash flows for 2024. The bright outlook is supported by the growing market demand for its mobile robotic forklifts and underride vehicles.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.
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Antero Midstream (AM) Q4 Earnings Beat on Compression Volumes
Antero Midstream Corporation (AM - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 24 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 $260 million surpassed the Zacks Consensus Estimate of $249 million. The top line also increased from $242 million recorded in the year-ago quarter.
Such strong quarterly results were primarily driven by higher compression and increased low pressure gathering volumes.
Antero Midstream Corporation Price, Consensus and EPS Surprise
Antero Midstream Corporation price-consensus-eps-surprise-chart | Antero Midstream Corporation Quote
Operational Performance
In the fourth quarter, average daily compression volumes were 3,343 million cubic feet (MMcf/d) compared with 2,945 MMcf/d in the year-ago period. The reported figure was also higher than our estimate of 3,126 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 3,047 MMcf/d, up from the year-ago period’s level of 2,762 MMcf/d. The figure was also higher than our estimate of 2,767 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 3,377 MMcf/d compared with 3,070 MMcf/d in the fourth quarter of 2022. The figure was also higher than our estimate of 3,207 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 94 MBbls/d, down approximately 15% from the prior-year quarter’s level of 111 MBbls/d. On a per-barrel basis, the average freshwater distribution fee was $4.22 compared with $4.09 in the year-ago period. The figure was also higher than our estimate of $4.10.
Operating Expenses
Direct operating expenses amounted to $50.8 million, up from $48.3 million recorded a year ago.
Antero Midstream’s total operating expenses came in at $104.5 million, up from $97.4 million recorded in the corresponding period of 2022.
Balance Sheet
As of Dec 31, the company had cash and cash equivalents of $66,000. As of the same date, the company had $3,213.2 million of long-term debt.
Outlook
For 2024, Antero Midstream expects adjusted EBITDA to be in the range of $1,020-$1,060 million, indicating a 5% increase from the 2023 level at the midpoint. The company projects Free Cash Flows after dividends in the range of $235-$275 million for 2024. The capital budget for 2024 is expected to be in the band of $150-$170 million, indicating a 14% decrease from the 2023 level at the midpoint.
Zacks Rank and Key Picks
Currently, AM holds a Zacks Rank #3 (Hold).
Investors might want to look at some better-ranked stocks in the energy sector, such as Oceaneering International (OII - Free Report) , Energy Transfer LP (ET - Free Report) and Harbour Energy (HBRIY - Free Report) . While both Oceaneering International and Energy Transfer currently sport a Zacks Rank #1 (Strong Buy), Harbour Energy holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International is a market-leading supplier of offshore equipment and technology solutions to the energy industry. The company has projected an increase in free cash flows for 2024. The bright outlook is supported by the growing market demand for its mobile robotic forklifts and underride vehicles.
Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 125,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, the company’s outlook seems positive.
Harbour Energy is a leading independent oil and gas company, primarily involved in upstream operations. The recently announced acquisition of Wintershall Dea asset portfolio is expected to increase HBRIY's estimated production. The company has also done well in reducing its debt in the past year.