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Why Is Enterprise Products (EPD) Up 1.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Enterprise Products Partners (EPD - Free Report) . Shares have added about 1.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Enterprise Q1 Earnings and Revenues Top Estimates
Enterprise Products Partners LP’s 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Enterprise Products has an average Growth Score of C, a grade with the same score on the momentum front. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Enterprise Products has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Enterprise Products (EPD) Up 1.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Enterprise Products Partners (EPD - Free Report) . Shares have added about 1.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Enterprise Q1 Earnings and Revenues Top Estimates
Enterprise Products Partners LP’s 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Enterprise Products has an average Growth Score of C, a grade with the same score on the momentum front. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Enterprise Products has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.