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WES Q2 Earnings Beat Estimates on Record Throughput & Pricing
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Key Takeaways
WES Q2 earnings rose 13.8% as revenues climbed 30%, both topping consensus estimates.
Record Delaware throughput and the Brazos acquisition helped lift natural-gas volumes and margins.
WES raised 2026 EBITDA guidance after quarterly adjusted EBITDA hit a record $736.5 million.
Western Midstream Partners (WES - Free Report) reported second-quarter 2026 earnings of 99 cents per unit, up 13.8% from 87 cents a year ago. The bottom line beat the Zacks Consensus Estimate of 90 cents by 10%.
Quarterly revenues of $1.22 billion increased 30% year over year and topped the Zacks Consensus Estimate of $1.13 billion by 8.3%. Results benefited from impressive Delaware Basin natural gas and produced-water throughput, the Brazos acquisition contribution and higher commodity pricing.
Other players in the midstream space that have already reported results are Enterprise Products Partners (EPD - Free Report) and Kinder Morgan (KMI - Free Report) . EPD and KMI beat the Zacks Consensus Estimate for earnings in the June quarter of this year. Both (EPD - Free Report) and (KMI - Free Report) have a strong presence in the midstream business, which is relatively more stable than upstream activities.
Western Midstream Posts Strong Throughput Gains
Natural-gas throughput attributable to WES averaged 5,343 million cubic feet per day (MMcf/D), up 3% sequentially. Delaware Basin natural-gas throughput reached a record 2,140 MMcf/D, increasing 5% from the first quarter, thanks to the contribution from the Brazos Delaware acquisition.
Produced-water throughput rose 5% sequentially to 2,939 MBbls/D, while crude-oil and NGL throughput edged up to 523 MBbls/D. DJ Basin natural-gas throughput also reached a record 1,547 MMcf/D, signifying a 2% sequential increase.
WES Records Margin Expansion Across Three Streams
Adjusted gross margin per Mcf for natural-gas assets increased to $1.35 from $1.32 in the first quarter. Higher commodity pricing on excess NGL volumes under fixed-recovery contracts and the partial-quarter Brazos contribution supported the increase.
Adjusted gross margin per barrel for crude oil and NGL assets rose to $3.21 from $3.07, mainly due to higher Delaware Basin deficiency fees. Produced-water adjusted gross margin improved to 96 cents per barrel from 90 cents, primarily reflecting higher throughput.
Western Midstream Faces Higher Operating Costs
Total operating expenses increased to $714.95 million from $524.06 million in the prior-year quarter. Operation and maintenance expenses climbed to $285.35 million from $224.63 million, while general and administrative expenses increased to $85.93 million from $66.15 million.
The cost of the product surged to $117.44 million from $42.68 million. Depreciation and amortization increased to $205.95 million from $172.11 million. Despite the higher expense base, operating income advanced to $526.7 million from $444.48 million a year earlier.
WES Generates Record Adjusted EBITDA
Adjusted EBITDA reached a quarterly record of $736.5 million, increasing 19% year over year and roughly 8% sequentially. Distributable cash flow totaled $537.2 million.
Operating cash flow was $534.7 million, while free cash flow totaled $263.6 million. Free cash flow after distributions was negative $111 million, reflecting organic growth capital spending. Second-quarter capital expenditures totaled $308.3 million.
Western Midstream Raises 2026 Outlook
Western Midstream raised its 2026 adjusted EBITDA guidance to $2.75 to $2.95 billion, with the $2.85 billion midpoint up $250 million from its original outlook. Distributable cash flow guidance increased to $2.05-$2.25 billion, while free cash flow expectations rose to $1.1-$1.3 billion.
The partnership maintained its $850 million-$1 billion capital expenditure range but now expects spending near the high end. WES also reiterated its target of at least $3.70 per unit in distributions paid during 2026. Currently, WES carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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WES Q2 Earnings Beat Estimates on Record Throughput & Pricing
Key Takeaways
Western Midstream Partners (WES - Free Report) reported second-quarter 2026 earnings of 99 cents per unit, up 13.8% from 87 cents a year ago. The bottom line beat the Zacks Consensus Estimate of 90 cents by 10%.
Quarterly revenues of $1.22 billion increased 30% year over year and topped the Zacks Consensus Estimate of $1.13 billion by 8.3%. Results benefited from impressive Delaware Basin natural gas and produced-water throughput, the Brazos acquisition contribution and higher commodity pricing.
Other players in the midstream space that have already reported results are Enterprise Products Partners (EPD - Free Report) and Kinder Morgan (KMI - Free Report) . EPD and KMI beat the Zacks Consensus Estimate for earnings in the June quarter of this year. Both (EPD - Free Report) and (KMI - Free Report) have a strong presence in the midstream business, which is relatively more stable than upstream activities.
Western Midstream Posts Strong Throughput Gains
Natural-gas throughput attributable to WES averaged 5,343 million cubic feet per day (MMcf/D), up 3% sequentially. Delaware Basin natural-gas throughput reached a record 2,140 MMcf/D, increasing 5% from the first quarter, thanks to the contribution from the Brazos Delaware acquisition.
Produced-water throughput rose 5% sequentially to 2,939 MBbls/D, while crude-oil and NGL throughput edged up to 523 MBbls/D. DJ Basin natural-gas throughput also reached a record 1,547 MMcf/D, signifying a 2% sequential increase.
WES Records Margin Expansion Across Three Streams
Adjusted gross margin per Mcf for natural-gas assets increased to $1.35 from $1.32 in the first quarter. Higher commodity pricing on excess NGL volumes under fixed-recovery contracts and the partial-quarter Brazos contribution supported the increase.
Adjusted gross margin per barrel for crude oil and NGL assets rose to $3.21 from $3.07, mainly due to higher Delaware Basin deficiency fees. Produced-water adjusted gross margin improved to 96 cents per barrel from 90 cents, primarily reflecting higher throughput.
Western Midstream Faces Higher Operating Costs
Total operating expenses increased to $714.95 million from $524.06 million in the prior-year quarter. Operation and maintenance expenses climbed to $285.35 million from $224.63 million, while general and administrative expenses increased to $85.93 million from $66.15 million.
The cost of the product surged to $117.44 million from $42.68 million. Depreciation and amortization increased to $205.95 million from $172.11 million. Despite the higher expense base, operating income advanced to $526.7 million from $444.48 million a year earlier.
WES Generates Record Adjusted EBITDA
Adjusted EBITDA reached a quarterly record of $736.5 million, increasing 19% year over year and roughly 8% sequentially. Distributable cash flow totaled $537.2 million.
Operating cash flow was $534.7 million, while free cash flow totaled $263.6 million. Free cash flow after distributions was negative $111 million, reflecting organic growth capital spending. Second-quarter capital expenditures totaled $308.3 million.
Western Midstream Raises 2026 Outlook
Western Midstream raised its 2026 adjusted EBITDA guidance to $2.75 to $2.95 billion, with the $2.85 billion midpoint up $250 million from its original outlook. Distributable cash flow guidance increased to $2.05-$2.25 billion, while free cash flow expectations rose to $1.1-$1.3 billion.
The partnership maintained its $850 million-$1 billion capital expenditure range but now expects spending near the high end. WES also reiterated its target of at least $3.70 per unit in distributions paid during 2026. Currently, WES carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.