May 11, 2021 [Yahoo!Finance] – Enterprise Products Partners LP EPD reported first-quarter 2021 adjusted earnings per limited partner unit of 64 cents, beating the Zacks Consensus Estimate of 50 cents and improving from the year-ago quarter profit of 61 cents.
Revenues increased to $9,155 million from $7,483 million in the prior-year quarter. Moreover, the top line beat the consensus estimate of $6,951 million.
The strong quarterly results were supported by higher contributions from natural gas processing business and the partnership’s Permian Basin natural gas gathering system.
Segmental Performance
Gross operating income at NGL Pipelines & Services increased from $1,042 million in the year-ago quarter to $1,086.4 million. Higher contributions from natural gas processing business and associated NGL marketing activities primarily aided the segment.
Natural Gas Pipelines and Services’ gross operating income increased to $535.2 million from $283.8 million in the year-ago quarter. The upside was owing to higher contributions from the partnership’s Permian Basin natural gas gathering system.
Crude Oil Pipelines & Services recorded gross operating income of $400.2 million, which decreased from $452.9 million in the prior-year quarter owing to a drop in fees and transportation volumes from the South Texas crude oil pipeline system.
Gross operating income at Petrochemical & Refined Products Services amounted to $281.5 million compared with $278.5 million a year ago, thanks to higher pipeline transportation volumes.
DCF
Quarterly distribution improved 1.1% year over year to 45 cents per common unit or $1.80 per unit on an annualized basis.
Adjusted distributable cash flow was $1,737.3 million, up from $1,553.6 million a year ago, and provided coverage of 1.7x. Notably, the partnership retained $746 million of distributable cash flow in the March quarter.
Financials
For the quarter, Enterprise Products’ total capital expenditure was $682 million.
As of Mar 31, 2021, its outstanding total debt principal was $28.9 billion. Enterprise Products’ consolidated liquidity amounted to $5.1 billion, which included unrestricted cash on hand and available borrowing capacity under revolving credit facility.
Outlook
The partnership reaffirmed expectations for growth capital spending for 2021 and 2022 at $1.6 billion and $800 million, respectively. Notably, the partnership projects sustaining capital spending for this year at $440 million.
Zacks Rank & Stocks to Consider
Enterprise Products currently carries a Zacks Rank #3 (Hold). Meanwhile, a fe- better ranked players in the energy space include Whiting Petroleum Corporation WLL, Continental Resources, Inc. CLR and Matador Resources Company MTDR. All the stocks sport a Zacks Rank #1 (Strong Buy).
Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.
Continental is likely to see earnings growth of 256% in 2021.
Matador is expected to witness earnings growth of 300% in 2021.
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