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Antero Midstream Corporation (AM) Down 4.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Antero Midstream Corporation (AM - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Antero Midstream Corporation 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 catalysts.
Antero Midstream Q2 Earning & Revenues Beat Estimates
Antero Midstream reported second-quarter adjusted earnings per share of 23 cents, which beat the Zacks Consensus Estimate of 19 cents. The bottom line increased from the year-ago quarter’s 22 cents per share.
Total quarterly revenues of $232.8 million surpassed the Zacks Consensus Estimate of $217 million. The top line improved from $219.7 million in the year-ago quarter.
The strong quarterly earnings can be attributed to lower operating expenses, and higher daily compression and fresh water delivery volumes.
Operational Performance
For second-quarter 2021, average daily compression volumes were recorded at 2,744 million cubic feet (MMcf/d), marginally increased from the year-ago level of 2,712 MMcf/d. On a per-Mcf basis, the compression fee was 20 cents, in line with the prior-year quarter.
For the reported quarter, high-pressure gathering volumes totaled 2,826 MMcf/d, down from the year-ago period’s 2,839 MMcf/d. On a per-Mcf basis, average gathering high-pressure fee was 20 cents, flat with the prior-year level.
Low-pressure gathering volumes averaged 2,897 MMcf/d, up from the second-quarter 2020 figure of 2,869 MMcf/d. On a per-Mcf basis, average gathering low-pressure fee was 33 cents, in line with the prior-year level.
Fresh water delivery volumes were at 104 MBbls/d, up 2% from the prior-year level of 102 MBbls/d. On a per-barrel basis, average fresh water distribution fee was $3.97 per barrel for the second quarter, improving from the prior-year level of $3.96.
Operating Expenses
For second-quarter 2021, direct operating expenses were recorded at $39.6 million, down from $42.1 million a year ago. G&A expenses rose to $14.3 million from $12.4 million in the year-ago quarter.
The decrease in direct operating expenses can be attributed to lower costs associated with flowback and produced water due to the company's blending operations.
Total expenses for the quarter were $81.4 million, down from $85 million in second-quarter 2020.
Balance Sheet
As of Jun 30, Antero Midstream had cash and cash equivalents of only $678,000, reflecting a significant increase from $261,000 in the first quarter. As of the same date, the company had $3,087.7 million of long-term debt, sequentially down from $3,103.4 million. It had a long-term debt to capitalization of 57%.
Other Details
Free cash flow after dividend payments was $3.2 million for the second quarter. Notably, this was the third time in its history that the company generated positive free cash flow after dividend payments.
Capital expenditure was recorded at $71 million, up 20.3% from a year ago. Net cash from operations was $195 million for the reported quarter.
Outlook
For 2021, Antero Midstream reiterated its plan to invest capital of $240-$260 million. The company has an organic project backlog of $1.05-$1.15 billion for 2021-2025.
Antero Midstream is well-positioned to deliver peer-leading free cash flow, with a declining leverage profile in 2021. The company expects to generate more than $750 million of free cash flow in 2021, and $3.5 billion between 2021 and 2025. It anticipates an absolute debt reduction of $900 million for 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Antero Midstream Corporation has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Antero Midstream Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Antero Midstream Corporation (AM) Down 4.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Antero Midstream Corporation (AM - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Antero Midstream Corporation 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 catalysts.
Antero Midstream Q2 Earning & Revenues Beat Estimates
Antero Midstream reported second-quarter adjusted earnings per share of 23 cents, which beat the Zacks Consensus Estimate of 19 cents. The bottom line increased from the year-ago quarter’s 22 cents per share.
Total quarterly revenues of $232.8 million surpassed the Zacks Consensus Estimate of $217 million. The top line improved from $219.7 million in the year-ago quarter.
The strong quarterly earnings can be attributed to lower operating expenses, and higher daily compression and fresh water delivery volumes.
Operational Performance
For second-quarter 2021, average daily compression volumes were recorded at 2,744 million cubic feet (MMcf/d), marginally increased from the year-ago level of 2,712 MMcf/d. On a per-Mcf basis, the compression fee was 20 cents, in line with the prior-year quarter.
For the reported quarter, high-pressure gathering volumes totaled 2,826 MMcf/d, down from the year-ago period’s 2,839 MMcf/d. On a per-Mcf basis, average gathering high-pressure fee was 20 cents, flat with the prior-year level.
Low-pressure gathering volumes averaged 2,897 MMcf/d, up from the second-quarter 2020 figure of 2,869 MMcf/d. On a per-Mcf basis, average gathering low-pressure fee was 33 cents, in line with the prior-year level.
Fresh water delivery volumes were at 104 MBbls/d, up 2% from the prior-year level of 102 MBbls/d. On a per-barrel basis, average fresh water distribution fee was $3.97 per barrel for the second quarter, improving from the prior-year level of $3.96.
Operating Expenses
For second-quarter 2021, direct operating expenses were recorded at $39.6 million, down from $42.1 million a year ago. G&A expenses rose to $14.3 million from $12.4 million in the year-ago quarter.
The decrease in direct operating expenses can be attributed to lower costs associated with flowback and produced water due to the company's blending operations.
Total expenses for the quarter were $81.4 million, down from $85 million in second-quarter 2020.
Balance Sheet
As of Jun 30, Antero Midstream had cash and cash equivalents of only $678,000, reflecting a significant increase from $261,000 in the first quarter. As of the same date, the company had $3,087.7 million of long-term debt, sequentially down from $3,103.4 million. It had a long-term debt to capitalization of 57%.
Other Details
Free cash flow after dividend payments was $3.2 million for the second quarter. Notably, this was the third time in its history that the company generated positive free cash flow after dividend payments.
Capital expenditure was recorded at $71 million, up 20.3% from a year ago. Net cash from operations was $195 million for the reported quarter.
Outlook
For 2021, Antero Midstream reiterated its plan to invest capital of $240-$260 million. The company has an organic project backlog of $1.05-$1.15 billion for 2021-2025.
Antero Midstream is well-positioned to deliver peer-leading free cash flow, with a declining leverage profile in 2021. The company expects to generate more than $750 million of free cash flow in 2021, and $3.5 billion between 2021 and 2025. It anticipates an absolute debt reduction of $900 million for 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Antero Midstream Corporation has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Antero Midstream Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.