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Why Is Enterprise Products (EPD) Up 4.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Enterprise Products Partners (EPD - Free Report) . Shares have added about 4.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enterprise Products due for a pullback? 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 Q4 Earnings Miss Estimates
Enterprise reported adjusted earnings per limited partner unit of 52 cents, missing the Zacks Consensus Estimate of 54 cents. However, the bottom line improved from the year-ago profit of 51 cents.
Total quarterly revenues of $11,370.2 million beat the Zacks Consensus Estimate of $10,262 million. The top line significantly increased from $7,044.2 million in the prior-year quarter.
The lower-than-expected earnings were driven by lower contributions from Natural Gas Pipelines and Services, and NGL Pipelines & Services businesses. The negatives were partially offset by increased contributions from Crude Oil Pipelines & Services, and Petrochemical & Refined Products Services businesses.
Segmental Performance
Pipeline volumes in NGL, crude oil, refined products and petrochemicals were recorded at 6.5 million barrels per day (bpd), in line with the year-ago quarter. Natural gas pipelines volumes were 14.6 trillion British thermal units per day (TBtus/d), up from 13.7 TBtus/d a year ago. However, marine terminal volumes were 1.5 million bpd, down from the year-ago quarter’s 1.6 bpd.
Gross operating income at NGL Pipelines & Services decreased from $1,144.2 million in the year-ago quarter to $1,109 million primarily due to lower average sales margins and a decline in pipeline transportation volumes.
Natural Gas Pipelines and Services’ gross operating income decreased to $195 million from $225.5 million in the year-ago quarter. The downside was due to a decline in gathering volumes. Lower contribution from its Texas Intrastate System also affected the segment.
Crude Oil Pipelines & Services recorded a gross operating income of $437.9 million, which increased from $428.2 million in the prior-year quarter due to an increase in pipeline volumes from the Midland-to-ECHO Pipeline System. Higher crude oil terminal revenues from its Midland and ECHO crude oil terminals aided the segment.
Gross operating income at Petrochemical & Refined Products Services amounted to $338.1 million compared with $296.8 million a year ago, thanks to higher average sales margins at Chambers County Propylene Production facilities. Increased by-product sales from butane isomerization operations and improved sales volumes from the octane enhancement business aided the segment.
Cash Flow
Adjusted distributable cash flow was $1,659.4 million, up from $1,628.8 million a year ago, and provided coverage of 1.7X. The partnership retained $2.6 billion of distributable cash flow in the December-end quarter. Free cash flow for the quarter was $1,723 million, significantly up from $1,020 million a year ago.
Financials
For fourth-quarter 2021, Enterprise’s total capital expenditure was $424.4 million.
As of Dec 31, 2021, its outstanding total debt principal was $29.8 billion. Enterprise’s consolidated liquidity amounted to $7.3 billion, up sequentially from $6.7 billion. The total liquidity amount included unrestricted cash on hand and available borrowing capacity under its revolving credit facility.
Outlook
For 2022, Enterprise expects growth capital spending of $1.5 billion. The partnership anticipates sustaining capital expenditure of $350 million. It currently has $2.2 billion worth of major capital projects under construction.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Enterprise Products has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. Notably, Enterprise Products 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 Enterprise Products (EPD) Up 4.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Enterprise Products Partners (EPD - Free Report) . Shares have added about 4.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enterprise Products due for a pullback? 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 Q4 Earnings Miss Estimates
Enterprise reported adjusted earnings per limited partner unit of 52 cents, missing the Zacks Consensus Estimate of 54 cents. However, the bottom line improved from the year-ago profit of 51 cents.
Total quarterly revenues of $11,370.2 million beat the Zacks Consensus Estimate of $10,262 million. The top line significantly increased from $7,044.2 million in the prior-year quarter.
The lower-than-expected earnings were driven by lower contributions from Natural Gas Pipelines and Services, and NGL Pipelines & Services businesses. The negatives were partially offset by increased contributions from Crude Oil Pipelines & Services, and Petrochemical & Refined Products Services businesses.
Segmental Performance
Pipeline volumes in NGL, crude oil, refined products and petrochemicals were recorded at 6.5 million barrels per day (bpd), in line with the year-ago quarter. Natural gas pipelines volumes were 14.6 trillion British thermal units per day (TBtus/d), up from 13.7 TBtus/d a year ago. However, marine terminal volumes were 1.5 million bpd, down from the year-ago quarter’s 1.6 bpd.
Gross operating income at NGL Pipelines & Services decreased from $1,144.2 million in the year-ago quarter to $1,109 million primarily due to lower average sales margins and a decline in pipeline transportation volumes.
Natural Gas Pipelines and Services’ gross operating income decreased to $195 million from $225.5 million in the year-ago quarter. The downside was due to a decline in gathering volumes. Lower contribution from its Texas Intrastate System also affected the segment.
Crude Oil Pipelines & Services recorded a gross operating income of $437.9 million, which increased from $428.2 million in the prior-year quarter due to an increase in pipeline volumes from the Midland-to-ECHO Pipeline System. Higher crude oil terminal revenues from its Midland and ECHO crude oil terminals aided the segment.
Gross operating income at Petrochemical & Refined Products Services amounted to $338.1 million compared with $296.8 million a year ago, thanks to higher average sales margins at Chambers County Propylene Production facilities. Increased by-product sales from butane isomerization operations and improved sales volumes from the octane enhancement business aided the segment.
Cash Flow
Adjusted distributable cash flow was $1,659.4 million, up from $1,628.8 million a year ago, and provided coverage of 1.7X. The partnership retained $2.6 billion of distributable cash flow in the December-end quarter. Free cash flow for the quarter was $1,723 million, significantly up from $1,020 million a year ago.
Financials
For fourth-quarter 2021, Enterprise’s total capital expenditure was $424.4 million.
As of Dec 31, 2021, its outstanding total debt principal was $29.8 billion. Enterprise’s consolidated liquidity amounted to $7.3 billion, up sequentially from $6.7 billion. The total liquidity amount included unrestricted cash on hand and available borrowing capacity under its revolving credit facility.
Outlook
For 2022, Enterprise expects growth capital spending of $1.5 billion. The partnership anticipates sustaining capital expenditure of $350 million. It currently has $2.2 billion worth of major capital projects under construction.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Enterprise Products has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. Notably, Enterprise Products has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.