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Why Is TC Energy (TRP) Up 1.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for TC Energy (TRP - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TC Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
TC Energy’s Q4 Earnings Beat Estimates, Rise Y/Y
TC Energy’s fourth-quarter 2020 adjusted earnings of 88 cents per share beat the Zacks Consensus Estimate as well as the year-ago quarter’s figure of 78 cents. Stellar results can be attributed to the rapid development of projects in the Canadian Natural Gas Pipelines and Mexico Natural Gas Pipelines segments.
Moreover, TC Energy’s comparable EBITDA of C$2.32 billion in the December quarter was up marginally from C$2.31 billion in the prior-year period.
This North America-based energy infrastructure provider’s quarterly revenues of $2.53 billion increased 2.3% year over year.
Segmental Information
Canadian Natural Gas Pipelines reported comparable EBITDA of C$682 million, up 10.4% from the year-ago quarter’s levels. This upside was the outcome of robust growth at the Canadian Natural Gas Pipelines owing to improved rate base earnings, flow-through depreciation and financial charges on the NGTL System from additional facilities.
U.S. Natural Gas Pipelines’ comparable EBITDA of C$919 million reflects a 7.5% increase from the prior-year quarter’s level. This upside can be attributed to reduced operating costs and increased earnings from ANR owing to the natural gas sale from some gas storage facilities.
Mexico Natural Gas Pipelines’ comparable EBITDA of C$170 million improved marginally from the year-earlier quarter’s figure of C$153 million. This upside came primarily on the back of solid earnings from investment in the Sur de Texas pipeline, which became operational in 2019 September.
Liquids Pipelines unit’s comparable EBITDA of C$408 million in the reported quarter deteriorated from the year-earlier quarter’s level of C$472 million. This downtrend resulted from the plunging volumes of the Keystone Pipeline System. Moreover, lower earnings from liquids marketing activities were a prime reason.
Power and Storage posted a comparable EBITDA of C$161 million, plummeting 23.3% year over year due to an earnings decline from Bruce Power, thanks to the planned commencement of unit 6.
Capital Expenditures and Balance Sheet
As of Dec 31, 2020, TC Energy’s capital investments summed C$2.2 billion. Concurrently, the company had cash and cash equivalents worth C$1.53 billion and a long-term debt of C$34.9 billion. Its total debt to total capital was 57.8%.
Key Updates
The company re-emphasizes its aforementioned guidance. Last month, management of this leading industry player stated that its Keystone XL pipeline construction is likely to be discontinued in response to President Joe Biden’s pledge to suspend the presidential permits to proceed with the project construction. TC Energy is displeased with Biden’s decision and expects the pipeline’s extensive regulatory reviews to get revoked. The company further decided to terminate more than 1,000 construction jobs in the weeks ahead.
Management also mentioned that the company is progressing with the Wisconsin Access Project to increase its natural gas capacity. This $200-million project is also set to improve a pipeline system’s reliability that delivers fuel from various basins to the U.S. Midwest and the Gulf Coast.
Further, this energy infrastructure provider expects costs for its Coastal Gaslink pipeline in British Columbia to shoot up from its prior projections due to increased scale, permit deferrals and the impacts of the pandemic.
TC Energy's board of directors announced the fourth-quarter 2020 dividend of 87 Canadian cents per share (or C$3.48 cents annually).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, TC Energy has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, TC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is TC Energy (TRP) Up 1.6% Since Last Earnings Report?
A month has gone by since the last earnings report for TC Energy (TRP - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TC Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
TC Energy’s Q4 Earnings Beat Estimates, Rise Y/Y
TC Energy’s fourth-quarter 2020 adjusted earnings of 88 cents per share beat the Zacks Consensus Estimate as well as the year-ago quarter’s figure of 78 cents. Stellar results can be attributed to the rapid development of projects in the Canadian Natural Gas Pipelines and Mexico Natural Gas Pipelines segments.
Moreover, TC Energy’s comparable EBITDA of C$2.32 billion in the December quarter was up marginally from C$2.31 billion in the prior-year period.
This North America-based energy infrastructure provider’s quarterly revenues of $2.53 billion increased 2.3% year over year.
Segmental Information
Canadian Natural Gas Pipelines reported comparable EBITDA of C$682 million, up 10.4% from the year-ago quarter’s levels. This upside was the outcome of robust growth at the Canadian Natural Gas Pipelines owing to improved rate base earnings, flow-through depreciation and financial charges on the NGTL System from additional facilities.
U.S. Natural Gas Pipelines’ comparable EBITDA of C$919 million reflects a 7.5% increase from the prior-year quarter’s level. This upside can be attributed to reduced operating costs and increased earnings from ANR owing to the natural gas sale from some gas storage facilities.
Mexico Natural Gas Pipelines’ comparable EBITDA of C$170 million improved marginally from the year-earlier quarter’s figure of C$153 million. This upside came primarily on the back of solid earnings from investment in the Sur de Texas pipeline, which became operational in 2019 September.
Liquids Pipelines unit’s comparable EBITDA of C$408 million in the reported quarter deteriorated from the year-earlier quarter’s level of C$472 million. This downtrend resulted from the plunging volumes of the Keystone Pipeline System. Moreover, lower earnings from liquids marketing activities were a prime reason.
Power and Storage posted a comparable EBITDA of C$161 million, plummeting 23.3% year over year due to an earnings decline from Bruce Power, thanks to the planned commencement of unit 6.
Capital Expenditures and Balance Sheet
As of Dec 31, 2020, TC Energy’s capital investments summed C$2.2 billion. Concurrently, the company had cash and cash equivalents worth C$1.53 billion and a long-term debt of C$34.9 billion. Its total debt to total capital was 57.8%.
Key Updates
The company re-emphasizes its aforementioned guidance. Last month, management of this leading industry player stated that its Keystone XL pipeline construction is likely to be discontinued in response to President Joe Biden’s pledge to suspend the presidential permits to proceed with the project construction. TC Energy is displeased with Biden’s decision and expects the pipeline’s extensive regulatory reviews to get revoked. The company further decided to terminate more than 1,000 construction jobs in the weeks ahead.
Management also mentioned that the company is progressing with the Wisconsin Access Project to increase its natural gas capacity. This $200-million project is also set to improve a pipeline system’s reliability that delivers fuel from various basins to the U.S. Midwest and the Gulf Coast.
Further, this energy infrastructure provider expects costs for its Coastal Gaslink pipeline in British Columbia to shoot up from its prior projections due to increased scale, permit deferrals and the impacts of the pandemic.
TC Energy's board of directors announced the fourth-quarter 2020 dividend of 87 Canadian cents per share (or C$3.48 cents annually).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, TC Energy has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, TC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.