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Antero Midstream's Q3 Earnings Miss, Revenues Increase Y/Y

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Antero Midstream Corporation (AM - Free Report) reported third-quarter 2024 adjusted earnings per share of 23 cents, which missed the Zacks Consensus Estimate of 24 cents. The bottom line remained flat year over year.

Total quarterly revenues of $270 million were in line with the Zacks Consensus Estimate. The top line increased from $264 million recorded in the year-ago quarter.

The weak quarterly earnings can be attributed to decreased compression and low-pressure gathering volumes and higher total operating costs.

Operational Performance

Average daily compression volumes were 3,269 million cubic feet (MMcf/d) compared with 3,271 MMcf/d in the year-ago quarter. The reported figure was lower than our estimate of 3,388 MMcf/d. On a per-Mcf basis, the compression fee was 21 cents, which remained flat year over year.

High-pressure gathering volumes totaled 3,046 MMcf/d, up from the year-ago level of 2,935 MMcf/d. The figure was also higher than our estimate of 2,953 MMcf/d. On a per-Mcf basis, the average gathering high-pressure fee was 23 cents, higher than the year-ago quarter’s 21 cents. The reported figure also beat our estimate of 22 cents.

Low-pressure gathering volumes averaged 3,277 MMcf/d compared with 3,323 MMcf/d a year ago.  The figure came in lower than our estimate of 3,366 MMcf/d. On a per-Mcf basis, the average gathering low-pressure fee was 36 cents, higher than the prior-year level of 35 cents. The reported figure was in line with our estimate.

Freshwater delivery volumes were registered at 71 MBbls/d, down approximately 33% from the prior-year figure of 106 MBbls/d. On a per-barrel basis, the average freshwater distribution fee was $4.31 compared with $4.20 a year ago. The figure was also higher than our estimate of $4.22.

Operating Expenses

Direct operating expenses amounted to $51.7 million, down from $51.9 million recorded a year ago.

However, Antero Midstream’s total operating expenses totaled $107.4 million, up from $101.5 million recorded in the corresponding period of 2023.

Balance Sheet

As of Sept. 30, 2024, the company had no cash and cash equivalents. As of the same date, the company had $3,171.7 million of long-term debt.

Outlook

Antero Midstream has revised its 2024 guidance. It reduced its projection for net income and adjusted net income by $25 million and $15 million, respectively, to a range of $400-$420 million and $465-$485 million. This was due to a $10 million increase in interest expense from higher rates and refinancing costs. Other guidance remained unchanged.

The capital budget for 2024 is expected to be in the $150-$170 million range, indicating a 14% decrease from the 2023 level at the midpoint.

Zacks Rank and Other Key Picks

Currently, AM carries a Zacks Rank #2 (Buy).

Investors interested in the energy sector may look at some other top-ranked stocks like Archrock Inc. (AROC - Free Report) , CONSOL Energy Inc. (CEIX - Free Report) and The Williams Companies, Inc. (WMB - Free Report) . While Archrock and CONSOLsport a Zacks Rank #1 (Strong Buy) each, Williams Companies carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States. It focuses on midstream natural gas compression, provides natural gas contract compression services and generates stable fee-based revenues.

The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.10. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

CONSOL Energy is a producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates productive longwall mining operations primarily in the Northern Appalachian Basin. CEIX currently has a Value Score of A.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $11.50 and $15.15, respectively. The company has witnessed upward earnings estimate revisions for 2025 in the past 30 days.

The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.

The Zacks Consensus Estimate for WMB’s 2024 EPS is pegged at $1.75. The company has witnessed upward earnings estimate revisions for 2025 in the past seven days.

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