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TC Energy (TRP) Q1 Earnings Increase Y/Y, Sales Beat Estimates
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TC Energy Corporation (TRP - Free Report) reported first-quarter 2024 adjusted earnings of 92 cents per share, which beat the Zacks Consensus Estimate of 83 cents. The bottom line also increased from 89 cents reported in the year-ago period. This outperformance can be attributed to the company's Canadian Natural Gas Pipelines and Mexico Natural Gas Pipelines units' strong performance.
This North American energy infrastructure provider's quarterly revenues of $3.1 billion outpaced the Zacks Consensus Estimate by $27 million. The figure also increased 8.3% year over year due to solid segmental performances from Liquids Pipelines, Mexico Natural Gas Pipelines and Canadian Natural Gas Pipelines. TC Energy’s comparable EBITDA of C$3.1 billion was up from C$2.8 billion reported in the prior-year quarter.
TRP’s board of directors announced a quarterly dividend of 96 Canadian cents per common share for the second quarter of 2024. The dividend is payable on Jul 31, 2024, to shareholders of record at the close of business on Jun 28, 2024.
During the first quarter, the company declared the sale of Prince Rupert Gas Transmission (“PRGT”) entities to Nisga’a Nation and Western LNG, showcasing its persistent dedication to strategic goals.
It also progressed with a C$3 billion asset divestiture initiative by reaching an agreement to sell the PNGTs, anticipating pre-tax proceeds of about C$1.1 billion ($0.8 billion). This includes the purchaser's assumption of $250 million in outstanding Senior Notes at PNGTs.
TC Energy's board of directors chose Sean O’Donnell to succeed Joel Hunter as executive vice-president and chief financial officer, effective May 15, 2024. The company obtained positive Canadian and U.S. tax rulings regarding the spinoff transaction, and the prominent proxy advisor Institutional Shareholder Services (ISS) issued a voting recommendation in favor of the same.
TC Energy Corporation Price, Consensus and EPS Surprise
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$846 million, up 53.3% from the year-ago quarter’s level. The figure fell short of our estimate of C$858.6 million.
The year-over-year surge in EBITDA within Canadian Natural Gas Pipelines primarily stems from heightened EBITDA in Canadian Natural Gas Pipelines, chiefly driven by escalated flow-through costs and rate-base earnings on the NGTL System and Foothills.
U.S. Natural Gas Pipelines reported a comparable EBITDA of C$1.3 billion, indicating a 3.1% increase from the prior-year quarter’s recorded number. The growth in EBITDA from U.S. Natural Gas Pipelines was due to increased earnings from new projects, higher equity earnings and additional contract sales. Additionally, the figure exceeded our prediction of C$1.1 billion.
Mexico Natural Gas Pipelines reported a comparable EBITDA of C$214 million, up 40.1% from the year-ago quarter’s reported figure of C$172 million. The figure exceeded our prediction of C$207.5 million.
The rise in EBITDA in U.S. dollars from Mexico Natural Gas Pipelines was mainly because of higher earnings from Sur de Texas, which resulted from reduced income tax expenses and the effects of financial exposure in pesos. Additionally, the segment reported an increase in earnings from the lateral section of the Villa de Reyes pipeline, which started operating in the third quarter of 2023.
Liquids Pipelines’ comparable EBITDA of C$407 million increased from the prior-year quarter’s level of C$317 million. The figure also exceeded our projection of C$377.5 million. The growth in EBITDA within Liquids Pipelines was primarily due to higher volumes on the Keystone Pipeline System.
Power and Energy Solutions registered a comparable EBITDA of C$252 million, on par with the year-ago quarter’s level. The figure missed our projection of C$259.4 million.
Expenditure and Balance Sheet
As of Mar 31, 2024, TC Energy’s capital investments amounted to C$1.9 billion.
TRP had cash and cash equivalents worth C$3.2 billion and long-term debt of C$50.6 billion, with a debt-to-capitalization of 62.8% as of the same date.
Key Updates
The Zacks Rank #3 (Hold) company anticipates 2024 capital expenditures in the band of C$8.0-C$8.5 billion net, after accounting for non-controlling interests.
It anticipates comparable EBITDA between C$11.2 billion and C$11.5 billion for the entire year.
TRP anticipates a decrease in comparable earnings per common share from the year-ago level. This was primarily due to the combined effect of higher net income attributed to non-controlling interests. However, this decline was somewhat mitigated by the rise in comparable EBITDA and an increased AFUDC (resulting from expanded capital expenditures on the Southeast Gateway pipeline project).
The company expects capping annual net capital expenditures to be in the band of C$6-C$7 billion, with a preference toward the lower end, for 2025 and beyond.
Important Energy Earnings so far
While we have discussed TC Energy’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
EOG Resources, Inc. (EOG - Free Report) , an American energy company engaged in hydrocarbon exploration, announced first-quarter 2024 adjusted earnings per share of $2.82, which beat the Zacks Consensus Estimate of $2.70. The bottom line also increased from the year-ago quarter’s level of $2.69. Strong quarterly results were primarily driven by higher total production volumes.
Total quarterly revenues of $6.1 billion beat the Zacks Consensus Estimate of $5.9 billion. The top line also surpassed the prior-year quarter’s level of $6.04 billion. As of Mar 31, 2024, EOG had cash and cash equivalents worth $5.3 million and long-term debt of $3.8 billion.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments, and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure surpassed our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. It was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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TC Energy (TRP) Q1 Earnings Increase Y/Y, Sales Beat Estimates
TC Energy Corporation (TRP - Free Report) reported first-quarter 2024 adjusted earnings of 92 cents per share, which beat the Zacks Consensus Estimate of 83 cents. The bottom line also increased from 89 cents reported in the year-ago period. This outperformance can be attributed to the company's Canadian Natural Gas Pipelines and Mexico Natural Gas Pipelines units' strong performance.
This North American energy infrastructure provider's quarterly revenues of $3.1 billion outpaced the Zacks Consensus Estimate by $27 million. The figure also increased 8.3% year over year due to solid segmental performances from Liquids Pipelines, Mexico Natural Gas Pipelines and Canadian Natural Gas Pipelines. TC Energy’s comparable EBITDA of C$3.1 billion was up from C$2.8 billion reported in the prior-year quarter.
TRP’s board of directors announced a quarterly dividend of 96 Canadian cents per common share for the second quarter of 2024. The dividend is payable on Jul 31, 2024, to shareholders of record at the close of business on Jun 28, 2024.
During the first quarter, the company declared the sale of Prince Rupert Gas Transmission (“PRGT”) entities to Nisga’a Nation and Western LNG, showcasing its persistent dedication to strategic goals.
It also progressed with a C$3 billion asset divestiture initiative by reaching an agreement to sell the PNGTs, anticipating pre-tax proceeds of about C$1.1 billion ($0.8 billion). This includes the purchaser's assumption of $250 million in outstanding Senior Notes at PNGTs.
TC Energy's board of directors chose Sean O’Donnell to succeed Joel Hunter as executive vice-president and chief financial officer, effective May 15, 2024. The company obtained positive Canadian and U.S. tax rulings regarding the spinoff transaction, and the prominent proxy advisor Institutional Shareholder Services (ISS) issued a voting recommendation in favor of the same.
TC Energy Corporation Price, Consensus and EPS Surprise
TC Energy Corporation price-consensus-eps-surprise-chart | TC Energy Corporation Quote
Segmental Information
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$846 million, up 53.3% from the year-ago quarter’s level. The figure fell short of our estimate of C$858.6 million.
The year-over-year surge in EBITDA within Canadian Natural Gas Pipelines primarily stems from heightened EBITDA in Canadian Natural Gas Pipelines, chiefly driven by escalated flow-through costs and rate-base earnings on the NGTL System and Foothills.
U.S. Natural Gas Pipelines reported a comparable EBITDA of C$1.3 billion, indicating a 3.1% increase from the prior-year quarter’s recorded number. The growth in EBITDA from U.S. Natural Gas Pipelines was due to increased earnings from new projects, higher equity earnings and additional contract sales. Additionally, the figure exceeded our prediction of C$1.1 billion.
Mexico Natural Gas Pipelines reported a comparable EBITDA of C$214 million, up 40.1% from the year-ago quarter’s reported figure of C$172 million. The figure exceeded our prediction of C$207.5 million.
The rise in EBITDA in U.S. dollars from Mexico Natural Gas Pipelines was mainly because of higher earnings from Sur de Texas, which resulted from reduced income tax expenses and the effects of financial exposure in pesos. Additionally, the segment reported an increase in earnings from the lateral section of the Villa de Reyes pipeline, which started operating in the third quarter of 2023.
Liquids Pipelines’ comparable EBITDA of C$407 million increased from the prior-year quarter’s level of C$317 million. The figure also exceeded our projection of C$377.5 million. The growth in EBITDA within Liquids Pipelines was primarily due to higher volumes on the Keystone Pipeline System.
Power and Energy Solutions registered a comparable EBITDA of C$252 million, on par with the year-ago quarter’s level. The figure missed our projection of C$259.4 million.
Expenditure and Balance Sheet
As of Mar 31, 2024, TC Energy’s capital investments amounted to C$1.9 billion.
TRP had cash and cash equivalents worth C$3.2 billion and long-term debt of C$50.6 billion, with a debt-to-capitalization of 62.8% as of the same date.
Key Updates
The Zacks Rank #3 (Hold) company anticipates 2024 capital expenditures in the band of C$8.0-C$8.5 billion net, after accounting for non-controlling interests.
It anticipates comparable EBITDA between C$11.2 billion and C$11.5 billion for the entire year.
TRP anticipates a decrease in comparable earnings per common share from the year-ago level. This was primarily due to the combined effect of higher net income attributed to non-controlling interests. However, this decline was somewhat mitigated by the rise in comparable EBITDA and an increased AFUDC (resulting from expanded capital expenditures on the Southeast Gateway pipeline project).
The company expects capping annual net capital expenditures to be in the band of C$6-C$7 billion, with a preference toward the lower end, for 2025 and beyond.
Important Energy Earnings so far
While we have discussed TC Energy’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
EOG Resources, Inc. (EOG - Free Report) , an American energy company engaged in hydrocarbon exploration, announced first-quarter 2024 adjusted earnings per share of $2.82, which beat the Zacks Consensus Estimate of $2.70. The bottom line also increased from the year-ago quarter’s level of $2.69. Strong quarterly results were primarily driven by higher total production volumes.
Total quarterly revenues of $6.1 billion beat the Zacks Consensus Estimate of $5.9 billion. The top line also surpassed the prior-year quarter’s level of $6.04 billion. As of Mar 31, 2024, EOG had cash and cash equivalents worth $5.3 million and long-term debt of $3.8 billion.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments, and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure surpassed our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. It was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.