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Enterprise (EPD) Q1 Earnings and Revenues Top Estimates

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Enterprise Products Partners LP’s (EPD - Free Report) first-quarter 2024 adjusted earnings per limited partner unit of 66 cents beat the Zacks Consensus Estimate of 64 cents. The bottom line also increased from the year-ago quarter’s level of 64 cents.

Total quarterly revenues of $14.8 billion topped the Zacks Consensus Estimate of $13.4 billion. The top line also improved from $12.4 billion reported in the prior-year quarter.

The strong quarterly results can be attributed to increased operating margin of EPD’s fee-based businesses. 

Segmental Performance

Pipeline volumes in NGL, crude oil, refined products and petrochemicals totaled 7.4 million barrels per day (bpd), higher than the year-ago quarter’s level of 7.1 million bpd. Natural gas pipeline volumes amounted to 18.6 trillion British thermal units per day (TBtus/d), up from the year-ago quarter’s 18 TBtus/d. Also, NGL, crude oil, refined products and petrochemical marine terminal volumes increased to 2.3 million bpd from 2 million in the year-ago period.

Gross operating margin at NGL Pipelines & Services increased from $1.2 billion in the year-ago quarter to $1.3 billion. This was primarily due to higher average transportation fees and an increase in transportation volumes.

Natural Gas Pipelines and Services’ gross operating margin decreased to $312 million from $314 million in the year-ago quarter. The decline was primarily due to lower total natural gas transportation volumes.

Crude Oil Pipelines & Services recorded a gross operating margin of $411 million, up from $397million in the prior-year quarter. This was mostly due to an increase in transportation volumes and higher average transportation fees.

The gross operating margin at Petrochemical & Refined Products Services was $444 million, up from $419 million recorded a year ago. The year-over-year increase was driven by higher total segment pipeline transportation volumes. The positives were partially offset by lower propylene sales and higher operating costs.

Cash Flow

The distributable cash flow totaled $1.92 billion compared with $1.94 billion in the year-ago period. The same provided a coverage of 1.7X. Enterprise retained $786 million of distributable cash flow in the first quarter. It generated an adjusted free cash flow of $2.1 billion compared with $2 billion in the year-ago quarter.

Financials

In the reported quarter, Enterprise’s total capital investment was $1.1 billion.

As of Mar 31, 2024, the outstanding total debt principal was $29.7 billion, and consolidated liquidity amounted to $4.5 billion.

Outlook

For 2024, Enterprise reiterated its projection for growth capital expenditures in the range of $3.25-$3.75 billion. The company also expects sustaining capital expenditures for 2024 to be $550 million, which includes planned petrochemical turnarounds. For 2025, EPD raised its projection for growth capital expenditures to the range of $3.25-$3.75 billion from $3 billion.

Zacks Rank and Key Picks

Currently, EPD carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company (SM - Free Report) , EOG Resources Inc., (EOG - Free Report) and PBF Energy Inc. (PBF - Free Report) . While SM Energy sports a Zacks Rank #1 (Strong Buy), EOG Resources and PBF Energy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy Company is an independent oil and gas company, engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America. SM currently has a Value Score of B.

The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.33 and $6.96, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

EOG Resources, an oil and gas exploration company, boasts attractive growth prospects, top-tier returns, and a disciplined management team, leveraging highly productive acreages in prime oil shale plays like the Permian and Eagle Ford.

The Zacks Consensus Estimate for EOG’s 2024 EPS is pegged at $12.32. The company has a Zacks Style Score of B for Value and A for Momentum. It has witnessed upward earnings estimate revisions for 2024 in the past seven days.

PBF Energy operates with a diverse asset base of six refineries, boasting higher daily crude processing capacity and a complex refining system, enabling the production of superior-grade refined products.

The Zacks Consensus Estimate for PBF’s 2024 and 2025 EPS is pegged at $7.39 and $5.87, respectively. PBF currently has a Zacks Style Score of A for Value and A for Momentum. Over the past 30 days, PBF has witnessed upward earnings estimate revisions for 2024 and 2025.

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