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Targa Resources (TRGP) Q4 Earnings Miss Estimates, Rise Y/Y
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Targa Resources Corp. (TRGP - Free Report) reported fourth-quarter 2020 adjusted net income per share of 15 cents, missing the Zacks Consensus Estimate of 23 cents due to increased operating expenses. However, the bottom line increased 7.14% year over year. This outperformance was led by strong volumes across the company’s Permian gathering and processing systems and a strong operational performance across its Logistics and Transportation systems.
The company’s adjusted EBITDA descended from $465.2 million a year earlier to $438.1 million in the fourth quarter of 2020.
Moreover, total revenues of $2.57 billion were 4% higher than the year-ago quarter and also outpaced the Zacks Consensus Estimate of $2.29 billion.
Operational Performance
The Gathering and Processing segment recorded an operating margin of $263.9 million during the quarter, down 8.9% from $289.7 million achieved in the year-ago period. However, Permian Basin volumes increased 9.9% year over year to 2,595.2 million cubic feet per day.
In the Logistics and Transportation (or the Downstream) segment, the company reported an operating margin of $322 million, up 6.6% year over year. Targa Resources saw fractionation volumes rise from 596.7 thousand barrels per day to 632.3, reflecting a 6% increase year over year. Moreover, export volumes expanded 38.3% year over year.
Targa Resources, Inc. Price, Consensus and EPS Surprise
Fourth-quarter 2020 distributable cash flow (DCF) was $293.9 million, 10.3% lower than $327.8 million in the year-ago period. Targa Resources paid out a dividend of 10 cents per share.
As of Dec 31, 2020, the company had $242.8 million in cash and cash equivalents and $7.39 billion in long-term debt. Debt-to-capitalization was 55.6%.
Guidance
For 2021, Targa Resources projects its growth capital spending guidance in the $350-$450 million range and full-year maintenance capex of nearly $130 million.
With the upstream players starting to restore shut-in volumes in response to higher oil prices, Targa Resources foresees 2021 adjusted EBITDA in the range $1.675-$1.77 billion with the midpoint indicating a 5% rise from the 2020 levels.
Targa Resources anticipates 2021 Permian natural gas inlet volumes to increase 5-10% from the 2020 levels. Further, it expects 2021 average total Field Gathering and Processing natural gas inlet volumes to be flat with the 2020 average.
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Targa Resources (TRGP) Q4 Earnings Miss Estimates, Rise Y/Y
Targa Resources Corp. (TRGP - Free Report) reported fourth-quarter 2020 adjusted net income per share of 15 cents, missing the Zacks Consensus Estimate of 23 cents due to increased operating expenses. However, the bottom line increased 7.14% year over year. This outperformance was led by strong volumes across the company’s Permian gathering and processing systems and a strong operational performance across its Logistics and Transportation systems.
The company’s adjusted EBITDA descended from $465.2 million a year earlier to $438.1 million in the fourth quarter of 2020.
Moreover, total revenues of $2.57 billion were 4% higher than the year-ago quarter and also outpaced the Zacks Consensus Estimate of $2.29 billion.
Operational Performance
The Gathering and Processing segment recorded an operating margin of $263.9 million during the quarter, down 8.9% from $289.7 million achieved in the year-ago period. However, Permian Basin volumes increased 9.9% year over year to 2,595.2 million cubic feet per day.
In the Logistics and Transportation (or the Downstream) segment, the company reported an operating margin of $322 million, up 6.6% year over year. Targa Resources saw fractionation volumes rise from 596.7 thousand barrels per day to 632.3, reflecting a 6% increase year over year. Moreover, export volumes expanded 38.3% year over year.
Targa Resources, Inc. Price, Consensus and EPS Surprise
Targa Resources, Inc. price-consensus-eps-surprise-chart | Targa Resources, Inc. Quote
DCF, Capex & Balance Sheet
Fourth-quarter 2020 distributable cash flow (DCF) was $293.9 million, 10.3% lower than $327.8 million in the year-ago period. Targa Resources paid out a dividend of 10 cents per share.
As of Dec 31, 2020, the company had $242.8 million in cash and cash equivalents and $7.39 billion in long-term debt. Debt-to-capitalization was 55.6%.
Guidance
For 2021, Targa Resources projects its growth capital spending guidance in the $350-$450 million range and full-year maintenance capex of nearly $130 million.
With the upstream players starting to restore shut-in volumes in response to higher oil prices, Targa Resources foresees 2021 adjusted EBITDA in the range $1.675-$1.77 billion with the midpoint indicating a 5% rise from the 2020 levels.
Targa Resources anticipates 2021 Permian natural gas inlet volumes to increase 5-10% from the 2020 levels. Further, it expects 2021 average total Field Gathering and Processing natural gas inlet volumes to be flat with the 2020 average.
Zacks Rank & Other Key Picks
Targa Resources currently carries a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , PDC Energy, Inc. and Denbury Inc. , each presently flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>