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Enterprise (EPD) Q3 Earnings Miss Estimates, Revenues Fall Y/Y
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Enterprise Products Partners LP’s (EPD - Free Report) third-quarter 2023 adjusted earnings per limited partner unit of 60 cents missed the Zacks Consensus Estimate of 63 cents. The bottom line also declined from the year-ago quarter’s level of 63 cents.
Total quarterly revenues of $11,998 million missed the Zacks Consensus Estimate of $12,340 million. The top line also declined from $15,468 million reported in the prior-year quarter.
Weak quarterly results can be attributed to lower natural gas gathering and processing margins.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Pipeline volumes in NGL, crude oil, refined products and petrochemicals were 7.4 million barrels per day (bpd), higher than the year-ago quarter’s level of 6.7 million bpd. Natural gas pipeline volumes were 18.4 trillion British thermal units per day (TBtus/d), up from 17.5 TBtus/d registered a year ago. Also, NGL, crude oil, refined products and petrochemical marine terminal volumes increased to 2.1 million bpd from 1.7 million bpd in the year-ago period.
Gross operating margin at NGL Pipelines & Services declined from $1,296 million in the year-ago quarter to $1,196 billion. Our estimate for the same was pinned at $1,301.2 million. This was primarily due to lower average sales margin and declining sales volume.
Natural Gas Pipelines and Services’ gross operating margin decreased to $239 million from $278 million in the year-ago quarter. The reported figure came in lower than our estimate of $275.8 million. The decline in natural gas and NGL prices resulted in an overall reduction in the average processing margin across the majority of the partnership's processing facilities.
Crude Oil Pipelines & Services recorded a gross operating margin of $432 million, up from $415 million recorded in the prior-year quarter, thanks to improved transportation volumes. The reported figure also beat our estimate of $388.5 million.
Gross operating margin at Petrochemical & Refined Products Services was $453 million compared with $353 million recorded a year ago. The figure beat our estimate of $334 million. The increase was driven by higher average transportation fees generated by the partnership’s propylene pipeline systems.
Cash Flow
The distributable cash flow totaled $1,869 million compared with $1,868 million in the year-ago period. The same provided a coverage of 1.7X. The partnership retained $773 million of distributable cash flow in the September-ended quarter. It generated an adjusted free cash flow of $1,173 million, down from $1,476 million recorded in the year-ago quarter.
Financials
In third-quarter 2023, Enterprise’s total capital investment was $826 million.
As of Sep 30, 2023, its outstanding total debt principal was $29.2 billion. Enterprise’s consolidated liquidity amounted to $3.8 billion.
Outlook
For 2023, Enterprise expects growth capital expenditures of $3 billion. Sustaining capital expenditure is projected to be $400 million.
Zacks Rank & Stocks to Consider
Enterprise currently carries a Zacks Rank #3 (Hold).
Liberty reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver-CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
The company’s board of directors announced a cash dividend of 7 cents per common share, payable on Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.
Matador Resources reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59. MTDR’s milestone led to better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, MTDR expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the previously mentioned 143,000 BOE/D.
Oceaneering International reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to robust results in certain segments.
For the fourth quarter of 2023, OII anticipates a decline in EBITDA on relatively flat revenues compared with the third-quarter results.
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Enterprise (EPD) Q3 Earnings Miss Estimates, Revenues Fall Y/Y
Enterprise Products Partners LP’s (EPD - Free Report) third-quarter 2023 adjusted earnings per limited partner unit of 60 cents missed the Zacks Consensus Estimate of 63 cents. The bottom line also declined from the year-ago quarter’s level of 63 cents.
Total quarterly revenues of $11,998 million missed the Zacks Consensus Estimate of $12,340 million. The top line also declined from $15,468 million reported in the prior-year quarter.
Weak quarterly results can be attributed to lower natural gas gathering and processing margins.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Enterprise Products Partners L.P. price-consensus-eps-surprise-chart | Enterprise Products Partners L.P. Quote
Segmental Performance
Pipeline volumes in NGL, crude oil, refined products and petrochemicals were 7.4 million barrels per day (bpd), higher than the year-ago quarter’s level of 6.7 million bpd. Natural gas pipeline volumes were 18.4 trillion British thermal units per day (TBtus/d), up from 17.5 TBtus/d registered a year ago. Also, NGL, crude oil, refined products and petrochemical marine terminal volumes increased to 2.1 million bpd from 1.7 million bpd in the year-ago period.
Gross operating margin at NGL Pipelines & Services declined from $1,296 million in the year-ago quarter to $1,196 billion. Our estimate for the same was pinned at $1,301.2 million. This was primarily due to lower average sales margin and declining sales volume.
Natural Gas Pipelines and Services’ gross operating margin decreased to $239 million from $278 million in the year-ago quarter. The reported figure came in lower than our estimate of $275.8 million. The decline in natural gas and NGL prices resulted in an overall reduction in the average processing margin across the majority of the partnership's processing facilities.
Crude Oil Pipelines & Services recorded a gross operating margin of $432 million, up from $415 million recorded in the prior-year quarter, thanks to improved transportation volumes. The reported figure also beat our estimate of $388.5 million.
Gross operating margin at Petrochemical & Refined Products Services was $453 million compared with $353 million recorded a year ago. The figure beat our estimate of $334 million. The increase was driven by higher average transportation fees generated by the partnership’s propylene pipeline systems.
Cash Flow
The distributable cash flow totaled $1,869 million compared with $1,868 million in the year-ago period. The same provided a coverage of 1.7X. The partnership retained $773 million of distributable cash flow in the September-ended quarter. It generated an adjusted free cash flow of $1,173 million, down from $1,476 million recorded in the year-ago quarter.
Financials
In third-quarter 2023, Enterprise’s total capital investment was $826 million.
As of Sep 30, 2023, its outstanding total debt principal was $29.2 billion. Enterprise’s consolidated liquidity amounted to $3.8 billion.
Outlook
For 2023, Enterprise expects growth capital expenditures of $3 billion. Sustaining capital expenditure is projected to be $400 million.
Zacks Rank & Stocks to Consider
Enterprise currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Liberty Energy Inc. (LBRT - Free Report) , Matador Resources Company (MTDR - Free Report) and Oceaneering International, Inc. (OII - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The Denver-CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
The company’s board of directors announced a cash dividend of 7 cents per common share, payable on Dec 20, 2023, to stockholders of record as of Dec 6, 2023. The dividend increased 40% from the previous quarter’s level.
Matador Resources reported third-quarter 2023 adjusted earnings of $1.86 per share, which beat the Zacks Consensus Estimate of $1.59. MTDR’s milestone led to better-than-expected third-quarter results, with the highest-ever total production averaging more than 135,000 barrels of oil and natural gas equivalent per day.
For the fourth quarter of 2023, MTDR expects an average daily oil equivalent production of 145,000 BOE. The recent guidance indicates a 2% upward revision from the previously mentioned 143,000 BOE/D.
Oceaneering International reported third-quarter 2023 adjusted earnings of 38 cents per share, which beat the Zacks Consensus Estimate of 27 cents. OII’s outperformance was largely due to robust results in certain segments.
For the fourth quarter of 2023, OII anticipates a decline in EBITDA on relatively flat revenues compared with the third-quarter results.