It has been about a month since the last earnings report for Enterprise Products Partners (EPD Quick QuoteEPD - Free Report) . Shares have lost about 1.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Enterprise Products due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Enterprise Products Q2 Earnings Top Estimates, Fall Y/Y

Enterprise Productsreported second-quarter 2020 adjusted earnings per limited partner unit of 47 cents, beating the Zacks Consensus Estimate by a penny. The bottom line, however, deteriorated from the year-ago quarter’s 55 cents per unit.

Revenues declined to $5,751 million from $8,276 million in the prior-year quarter. The top line also missed the consensus estimate of $6,962 million.

The better-than-expected earnings for the second quarter were supported by higher marine terminal volumes of NGL and increased margins from uncontracted storage capacity. The positives were partially offset by lower natural gas pipeline transportation volumes and decreased propylene production volumes

Segmental Performance

Gross operating income at NGL Pipelines & Services increased from $966.3 million in the year-ago quarter to $968.1 million on higher marine terminal volumes of NGL.

Natural Gas Pipelines and Services’ gross operating income decreased to $208.9 million from $301.8 million in the year-ago quarter. The downsize is owing to lower natural gas pipeline transportation volumes.

Crude Oil Pipelines & Services recorded gross operating income of $634.4 million, which increased from $513.2 million in the prior-year quarter owing to an increase in margins from uncontracted storage capacity.

Gross operating income at Petrochemical & Refined Products Services amounted to $191.5 million compared with $304.9 million a year ago. The underperformance was owing to the decrease in propylene production volumes.

DCF

Quarterly distribution improved 1.1% year over year to 44.50 cents per common unit or $1.78 per unit on an annualized basis.

Adjusted distributable cash flow was $1,577 million, down 8.4% year over year, and provided coverage of 1.6x. Notably, the partnership retained $597 million of distributable cash flow in the second quarter.

Financials

During the quarter, the partnership’s capital expenditure was $910 million.

As of Jun 30, 2020, its outstanding total debt principal was $29.9 billion. Enterprise Products’ consolidated liquidity amounted to $7.3 billion, which included unrestricted cash on hand and available borrowing capacity.

Outlook

The partnership foresees investment of roughly $2.5 billion to $3 billion for growth capital project for 2020. The partnership expects its sustaining capital expenditures for 2020 at $300 million. Moreover, Enterprise Products lowered growth capital investment projections for 2021 and 2022 to $2.3 billion and $1 billion, respectively, from the earlier projections.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Enterprise Products has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Enterprise Products has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.