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MPLX's Q2 Earnings and Revenues Miss Estimates, Sales Up Y/Y

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MPLX LP (MPLX - Free Report) recently reported second-quarter earnings of 55 cents per unit, missing the Zacks Consensus Estimate of 60 cents. The figure was in line with the year-ago level.

Revenues of $1,629 million were higher than second-quarter 2018 sales of $1,578 million. However, the top line lagged the Zacks Consensus Estimate of $1,644 million.

The quarterly results were affected by the Logistics and Storage segment’s lower-than-expected profit levels and lower weighted average natural gas liquids prices. These negatives were partially offset by year-over-year improvement in performance of core businesses in its Logistics and Storage unit.

MPLX LP Price, Consensus and EPS Surprise

MPLX LP Price, Consensus and EPS Surprise

MPLX LP price-consensus-eps-surprise-chart | MPLX LP Quote

Segmental Highlights

MPLX’s operating income from the Logistics and Storage segment jumped from $434 million a year ago to $486 million. However, the reported figure lagged the Zacks Consensus Estimate of $542 million. The year-over-year upside is attributable to strong performance of core businesses, partially offset by obstacles related to the weather in the Midwest region. Total pipeline throughput volume of 3,489 thousand barrels per day increased 3% from the year-ago level.

Operating income from the Gathering and Processing segment marginally decreased to $173 million from $174 million in the prior-year quarter due to lower weighted average natural gas liquids prices.

Costs and Expenses

Total costs and expenses in the quarter were recorded at $970 million, in line with the year-ago level.

Cash Flow

Distributable cash flow available to limited partners in second-quarter 2019 was $741 million, providing 1.36x distribution coverage, up from $695 million in the year-ago period. Distribution per unit was 66.75 cents in the reported quarter. This marks a 6.4% hike from the year-ago period and 1.5% sequential growth, representing the 26th consecutive quarterly distribution increase.  

Cash flow from operating activities in the quarter under review decreased to $834 million from $840 million recorded in the corresponding period of 2018.

Balance Sheet

As of Jun 30, 2019, the partnership’s cash and cash equivalents were $7 million. Its total debt amounted to $14.1 billion, while debt-to-capitalization ratio was 67.2%.

Outlook

On Jul 30, the partnership closed the Andeavor Logistics acquisition, which can affect third-quarter results. The partnership expects the Whistler project to come online in third-quarter 2021.

Zacks Rank and Stocks to Consider

Currently, SM Energy has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector are given below:

Transportadora de Gas del Sur S.A. (TGS - Free Report) is a midstream energy firm. In the trailing four quarters, the company delivered average positive earnings surprise of 114%. It has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lonestar Resources US Inc. is an oil and gas exploration and production company. In the trailing four quarters, the company missed earnings estimates only once and delivered average positive surprise of almost 52%. The company has a Zacks Rank #2 (Buy).

Keane Group, Inc. is a provider of integrated well completion services, primarily in the United States. In the trailing four quarters, the company delivered average positive earnings surprise of 320.2%. It has a Zacks Rank #2.

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