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DCP Midstream (DCP) Gains Marginally Despite Q1 Earnings Miss
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DCP Midstream, LP’s shares gained marginally since it reported year-over-year higher first-quarter earnings on May 3, thanks to favorable tariffs on NGL pipelines. This was partially offset by lower fractionator throughputs, leading to lower-than-expected quarterly earnings.
DCP Midstream reported first-quarter adjusted earnings of 99 cents per unit, which missed the Zacks Consensus Estimate of $1.10. The bottom line, however, increased from the year-ago quarter’s earnings of 96 cents per unit.
Total quarterly revenues of $2,726 million beat the Zacks Consensus Estimate of $1,935 million. However, the top line declined from $3,375 million in the year-ago quarter.
Operations
Logistics and Marketing
This segment of DCP Midstream recorded adjusted EBITDA of $205 million in the first quarter, down from the year-ago period’s $212 million. The underperformance was owing to lower contributions from NGL marketing and storage activities. This was partially nullified by favorable tariffs on NGL pipelines.
The average NGL pipeline throughput in the quarter was 723 thousand barrels per day (Mbpd), higher than the year-ago quarter’s 682 Mbpd. Fractionator throughputs were, however, recorded at 50 Mbpd, declining from 53 Mbpd in the year-ago quarter.
Gathering and Processing
The segment reported adjusted EBITDA of $223 million for the first quarter, down from $278 million in the year-ago quarter. A decline in commodity prices and increased operating and maintenance expenses hurt the segment.
Average natural gas wellhead volumes in the quarter rose to 4,524 million cubic feet per day (MMcf/d) from the year-ago period’s 4,110 MMcf/d. NGL gross production totaled 419 Mbpd, up from 402 Mbpd.
Total Expenses
Purchases and related costs declined year over year in the quarter under review. Operating and maintenance expenses rose to $197 million from $152 million in the first quarter of 2022.
Total operating costs and expenses were $2,605 million, down from the year-ago quarter’s figure of $3,365 million.
Financials
In first-quarter 2023, total growth capital expenditures and equity investments were $47 million. Sustaining capital in the quarter was $34 million. DCP generated an excess free cash flow of $93 million in the reported quarter.
At the end of the first quarter, DCP Midstream reported long-term debt of $4,892 million. Cash and cash equivalents were $1 million. It had current debt of $7 million.
Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past seven days.
Cactus has been aiding its clients in fast-tracking their well drilling and completion activities. The company has also been enabling lower operator emissions per barrel of production. Thus, there has been a significantly lower carbon intensity per well.
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DCP Midstream (DCP) Gains Marginally Despite Q1 Earnings Miss
DCP Midstream, LP’s shares gained marginally since it reported year-over-year higher first-quarter earnings on May 3, thanks to favorable tariffs on NGL pipelines. This was partially offset by lower fractionator throughputs, leading to lower-than-expected quarterly earnings.
DCP Midstream reported first-quarter adjusted earnings of 99 cents per unit, which missed the Zacks Consensus Estimate of $1.10. The bottom line, however, increased from the year-ago quarter’s earnings of 96 cents per unit.
Total quarterly revenues of $2,726 million beat the Zacks Consensus Estimate of $1,935 million. However, the top line declined from $3,375 million in the year-ago quarter.
Operations
Logistics and Marketing
This segment of DCP Midstream recorded adjusted EBITDA of $205 million in the first quarter, down from the year-ago period’s $212 million. The underperformance was owing to lower contributions from NGL marketing and storage activities. This was partially nullified by favorable tariffs on NGL pipelines.
The average NGL pipeline throughput in the quarter was 723 thousand barrels per day (Mbpd), higher than the year-ago quarter’s 682 Mbpd. Fractionator throughputs were, however, recorded at 50 Mbpd, declining from 53 Mbpd in the year-ago quarter.
Gathering and Processing
The segment reported adjusted EBITDA of $223 million for the first quarter, down from $278 million in the year-ago quarter. A decline in commodity prices and increased operating and maintenance expenses hurt the segment.
Average natural gas wellhead volumes in the quarter rose to 4,524 million cubic feet per day (MMcf/d) from the year-ago period’s 4,110 MMcf/d. NGL gross production totaled 419 Mbpd, up from 402 Mbpd.
Total Expenses
Purchases and related costs declined year over year in the quarter under review. Operating and maintenance expenses rose to $197 million from $152 million in the first quarter of 2022.
Total operating costs and expenses were $2,605 million, down from the year-ago quarter’s figure of $3,365 million.
Financials
In first-quarter 2023, total growth capital expenditures and equity investments were $47 million. Sustaining capital in the quarter was $34 million. DCP generated an excess free cash flow of $93 million in the reported quarter.
At the end of the first quarter, DCP Midstream reported long-term debt of $4,892 million. Cash and cash equivalents were $1 million. It had current debt of $7 million.
Zacks Rank & Stocks to Consider
Currently, DCP Midstream carries a Zacks Rank #4 (Sell). Better-ranked players in the energy space include Murphy USA Inc. (MUSA - Free Report) , Sunoco LP (SUN - Free Report) and Cactus, Inc. (WHD - Free Report) . While Murphy USA carries a Zacks Rank #2 (Buy), Sunoco and Cactus sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past seven days.
Cactus has been aiding its clients in fast-tracking their well drilling and completion activities. The company has also been enabling lower operator emissions per barrel of production. Thus, there has been a significantly lower carbon intensity per well.