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Antero Midstream (AM) Q2 Earnings Lag, Revenues Top Estimates

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Antero Midstream Partners L.P.’s (AM - Free Report) second-quarter 2018 adjusted earnings per limited partner unit of 41 cents lagged the Zacks Consensus Estimate of 43 cents. The bottom line, however, improved from earnings of 39 cents in the year-ago quarter.

Antero Midstream Partners LP Price, Consensus and EPS Surprise

 

Antero Midstream Partners LP Price, Consensus and EPS Surprise | Antero Midstream Partners LP Quote

Revenues in the quarter jumped to $251 million from $194 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $236 million.

The growth in gathering, compression and fresh water delivery volumes has helped it in posting higher earnings and revenues.This was partially offset by decrease in revenues from gathering and compression as well as water handling and treatment segments.

Distribution

Adjusted distributable cash flow was $142.2 million, up almost 30% from the prior-year quarter and provided coverage of 1.3x.

On Jul 18, Antero Midstream Partners declared a quarterly cash distribution of 41.5 cents per unit, or $1.66 per unit on an annualized basis, for the quarter ended Jun 30, 2018. This represents an increase of 30% and 6% on an annual basis and sequentially, respectively. The distribution is payable on Aug 17 to unitholders of record at the close of business on Aug 2.

Operational Performance

During the second quarter of 2018, compression volumes averaged a record 1,558 MMcf/d, up 31% compared to the second quarter of 2017 and also beat the Zacks Consensus Estimate of 1,573 MMcf/d. On a per-Mcf basis, compression fee was19 cents in line with the prior-year quarter level and the Zacks Consensus Estimate.

In the second quarter, high pressure gathering volumes averaged 1,932 MMcf/d, up 11% compared to the year-ago period but lagged the Zacks Cosensus Estimate of 1,937 MMcf/d. On a per-Mcf basis, average gathering high pressure fee was19 cents in line with the prior-year quarter level and the Zacks Consensus Estimate.

Low pressure gathering volumes averaged 1,981 MMcf/d, up 18% compared to the second quarter of 2017 but lagged the Zacks Cosensus Estimate of 1,992 MMcf/d. On a per-Mcf basis, average gathering low pressure fee was 32 cents in line with the year-ago quarter level and the Zacks Consensus Estimate.

Fresh water delivery volumes averaged 228 MBbl/d, up 32% compared to prior-year quarter and beat the Zacks Consensus Estimate of 176 MBbl/d. The growth was due to increased completion activity by Antero Resources. During the quarter, 48 well completions with its fresh water delivery system were serviced by Antero Midstream, up 29% compared to the year-ago quarter. On a per-barrel basis, average fresh water distribution fee was $3.78 in the second quarter in line with the Zacks Consensus Estimate but increased compared to the prior-year quarter level of $3.72.

Operating Expenses

Total operating expenses during the quarter was $101.2 million, down from $136.1 million in the prior year quarter.

Financials

During the quarter, the partnership’s capital investments were $128 million. As of Jun 30, 2018, Antero Midstream Partners had cash balance of $20 million. An amount of $770 million has been drawn by Antero Midstream from its bank credit facility of $1.5 billion. This results in a liquidity of $750 million.

Outlook

The partnership expects accelerated growth in the second half of 2018, as Antero Resources is anticipated to turn to sales 65-75 wells in the third quarter compared with 51 wells in the corresponding period of prior year.

Q2 Price Performance

During the April to June quarter, Antero Midstream Partners’ units returned 14% versus the industry’s 8% growth.



 

Zacks Rank & Key Picks

Antero Midstream Partners currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Canadian Natural Resources Limited (CNQ - Free Report) , China Petroleum and Chemical Corporation (SNP - Free Report) , also known as Sinopec, and Sunrun Inc (RUN - Free Report) . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural Resources, based in Calgary, Alberta, is an exploration and production (E&P) company. It pulled off an average positive earnings surprise of 4.7% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sunrun is engaged in offering solar services through various channels. The company delivered an average positive earnings surprise of 16.3% in the last four quarters.

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