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TC Energy (TRP) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
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TC Energy Corporation (TRP - Free Report) reported second-quarter 2024 adjusted earnings of 69 cents per share, which beat the Zacks Consensus Estimate of 65 cents. The bottom line decreased from 71 cents reported in the year-ago period. This was due to the company's Liquids Pipelines units' weak performance.
TRP's quarterly revenues of $3 billion outpaced the Zacks Consensus Estimate by $210 million. The figure also increased 4.7% year over year due to solid segmental performances from Canadian Natural Gas Pipelines, the U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, and Power and Energy Solutions.
TC Energy’s comparable EBITDA of C$2.7 billion was up from C$2.5 billion reported in the prior-year quarter. TRP’s board of directors announced a quarterly dividend of 96 Canadian cents per common share. The dividend is payable on Oct 31, 2024, to its shareholders of record at the close of business on Sep 27.
TC Energy Corporation Price, Consensus and EPS Surprise
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$846 million, up 8.5% from the year-ago quarter’s level. The figure beat our estimate of C$784.6 million. The year-over-year increase in EBITDA was driven by increased rate-based earnings in the NGTL System and Foothills.
U.S. Natural Gas Pipelines reported a comparable EBITDA of C$1 billion, indicating a 7.3% increase from the prior-year quarter’s reported actuals. The growth in EBITDA was due to increased earnings from new projects, higher equity earnings and additional contract sales. Additionally, the figure was in line with our prediction.
Mexico Natural Gas Pipelines reported a comparable EBITDA of C$286 million, up 48.2% from the year-ago quarter’s reported figure of C$192 million. The figure exceeded our estimate of C$193.3 million.
The rise can be attributed to higher equity earnings from Sur de Texas, influenced by peso-denominated financial exposure. Furthermore, the incremental earnings from the lateral section of the Villa de Reyes pipeline, which commenced service in the third quarter of 2023, contributed to this increase.
Liquids Pipelines’ comparable EBITDA of C$328 million decreased from the prior-year quarter’s level of C$363 million. The decrease was mainly due to reduced margins in liquids marketing activities. Additionally, the figure missed our projection of C$352.9 million.
Power and Energy Solutions registered a comparable EBITDA of C$227 million, up 4.6% from the year-ago quarter’s level of C$217 million. The growth was primarily due to higher contributions from the U.S. marketing business and increased earnings from Canadian Power. However, the figure missed our projection of C$244.1 million.
Expenditure and Balance Sheet
As of Jun 30, 2024, TC Energy’s capital investments amounted to C$1.6 billion.
Cash and cash equivalents amounted to C$4 billion and long-term debt totaled C$49.1 billion, with a debt-to-capitalization of 61% as of the same date.
Key Updates
TC Energy’s shareholders voted to approve the spinoff of the Liquids Pipelines business at the 2024 Annual and Special Meeting. Additionally, the company received unanimous support from its customers for a five-year negotiated revenue requirement settlement for the NGTL System, aiming to maximize asset value.
TRP announced approximately C$2.6 billion in asset divestitures as part of its overall C$3 billion asset divestiture program. In a landmark agreement, the company facilitated Canada’s largest Indigenous equity ownership deal, allowing Indigenous communities to acquire a 5.34% minority interest in the NGTL and Foothills Systems for gross proceeds of C$1 billion.
Further, TC Energy completed a strategic alliance agreement with CFE, resulting in CFE acquiring a 13.01% equity interest in TGNH assets for cash proceeds of CC$340 million and non-cash consideration. Additionally, Coastal GasLink LP refinanced its existing construction credit facility with a C$7.15 billion private bond offering of senior secured notes to the Canadian and U.S. investors in June 2024.
2024 Guidance
TRP expects its comparable EBITDA to be between C$11.2 and C$11.5 billion for 2024. The company anticipates comparable earnings per common share to be lower than the 2023 level, mainly due to an increase in net income attributable to non-controlling interests.
However, this will be partially offset by higher comparable EBITDA and increased Allowance for Funds Used During Construction related to higher capital expenditures on the Southeast Gateway pipeline project. Capital expenditures are projected to be at the lower end of the C$8 to C$8.5 billion range on a net basis, after accounting for non-controlling interests.
While it's early in the earnings season, there have been a few key energy releases so far. Let’s glance through a few of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, the bottom line was below the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. The company returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter's profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For full-year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.
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TC Energy (TRP) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
TC Energy Corporation (TRP - Free Report) reported second-quarter 2024 adjusted earnings of 69 cents per share, which beat the Zacks Consensus Estimate of 65 cents. The bottom line decreased from 71 cents reported in the year-ago period. This was due to the company's Liquids Pipelines units' weak performance.
TRP's quarterly revenues of $3 billion outpaced the Zacks Consensus Estimate by $210 million. The figure also increased 4.7% year over year due to solid segmental performances from Canadian Natural Gas Pipelines, the U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, and Power and Energy Solutions.
TC Energy’s comparable EBITDA of C$2.7 billion was up from C$2.5 billion reported in the prior-year quarter. TRP’s board of directors announced a quarterly dividend of 96 Canadian cents per common share. The dividend is payable on Oct 31, 2024, to its shareholders of record at the close of business on Sep 27.
TC Energy Corporation Price, Consensus and EPS Surprise
TC Energy Corporation price-consensus-eps-surprise-chart | TC Energy Corporation Quote
Segmental Information
Canadian Natural Gas Pipelines reported a comparable EBITDA of C$846 million, up 8.5% from the year-ago quarter’s level. The figure beat our estimate of C$784.6 million. The year-over-year increase in EBITDA was driven by increased rate-based earnings in the NGTL System and Foothills.
U.S. Natural Gas Pipelines reported a comparable EBITDA of C$1 billion, indicating a 7.3% increase from the prior-year quarter’s reported actuals. The growth in EBITDA was due to increased earnings from new projects, higher equity earnings and additional contract sales. Additionally, the figure was in line with our prediction.
Mexico Natural Gas Pipelines reported a comparable EBITDA of C$286 million, up 48.2% from the year-ago quarter’s reported figure of C$192 million. The figure exceeded our estimate of C$193.3 million.
The rise can be attributed to higher equity earnings from Sur de Texas, influenced by peso-denominated financial exposure. Furthermore, the incremental earnings from the lateral section of the Villa de Reyes pipeline, which commenced service in the third quarter of 2023, contributed to this increase.
Liquids Pipelines’ comparable EBITDA of C$328 million decreased from the prior-year quarter’s level of C$363 million. The decrease was mainly due to reduced margins in liquids marketing activities. Additionally, the figure missed our projection of C$352.9 million.
Power and Energy Solutions registered a comparable EBITDA of C$227 million, up 4.6% from the year-ago quarter’s level of C$217 million. The growth was primarily due to higher contributions from the U.S. marketing business and increased earnings from Canadian Power. However, the figure missed our projection of C$244.1 million.
Expenditure and Balance Sheet
As of Jun 30, 2024, TC Energy’s capital investments amounted to C$1.6 billion.
Cash and cash equivalents amounted to C$4 billion and long-term debt totaled C$49.1 billion, with a debt-to-capitalization of 61% as of the same date.
Key Updates
TC Energy’s shareholders voted to approve the spinoff of the Liquids Pipelines business at the 2024 Annual and Special Meeting. Additionally, the company received unanimous support from its customers for a five-year negotiated revenue requirement settlement for the NGTL System, aiming to maximize asset value.
TRP announced approximately C$2.6 billion in asset divestitures as part of its overall C$3 billion asset divestiture program. In a landmark agreement, the company facilitated Canada’s largest Indigenous equity ownership deal, allowing Indigenous communities to acquire a 5.34% minority interest in the NGTL and Foothills Systems for gross proceeds of C$1 billion.
Further, TC Energy completed a strategic alliance agreement with CFE, resulting in CFE acquiring a 13.01% equity interest in TGNH assets for cash proceeds of CC$340 million and non-cash consideration. Additionally, Coastal GasLink LP refinanced its existing construction credit facility with a C$7.15 billion private bond offering of senior secured notes to the Canadian and U.S. investors in June 2024.
2024 Guidance
TRP expects its comparable EBITDA to be between C$11.2 and C$11.5 billion for 2024. The company anticipates comparable earnings per common share to be lower than the 2023 level, mainly due to an increase in net income attributable to non-controlling interests.
However, this will be partially offset by higher comparable EBITDA and increased Allowance for Funds Used During Construction related to higher capital expenditures on the Southeast Gateway pipeline project. Capital expenditures are projected to be at the lower end of the C$8 to C$8.5 billion range on a net basis, after accounting for non-controlling interests.
TRP currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases so far. Let’s glance through a few of them.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, the bottom line was below the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. The company returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter's profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
Meanwhile, energy infrastructure provider Kinder Morgan (KMI - Free Report) reported second-quarter adjusted earnings per share of 26 cents, in line with the Zacks Consensus Estimate. The bottom line was favorably impacted by strong financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. Moreover, KMI’s second-quarter discounted cash flow (DCF) was $1.10 billion, up from $1.07 billion a year ago.
As of Jun 30, 2024, Kinder Morgan reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter-end. For full-year 2024, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figures.