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Why Is Enterprise Products (EPD) Up 1.8% 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 1.8% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Enterprise Q3 Earnings Miss Estimates, Revenues Fall Y/Y
Enterprise Products Partners LP’s 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Enterprise Products 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 these revisions 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 1.8% 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 1.8% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Enterprise Q3 Earnings Miss Estimates, Revenues Fall Y/Y
Enterprise Products Partners LP’s 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Enterprise Products 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 these revisions 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.