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Antero Midstream's (AM) Q2 Earnings & Sales Lag Estimates

Zacks Equity Research

Antero Midstream Corporation AM reported second-quarter 2019 adjusted earnings per share of 15 cents, up 19% from the year-ago level. However, the figure missed the Zacks Consensus Estimate of 22 cents.

Revenues in the quarter rose 5% year over year to $256 million. The top line, however, missed the Zacks Consensus Estimate of $281 million.

The weaker-than-expected results can be attributed to lower fresh water delivery volumes, partially offset by growth in gathering, compression and Clearwater treatment volumes.

Antero Midstrm Price, Consensus and EPS Surprise

Antero Midstrm Price, Consensus and EPS Surprise

Antero Midstrm price-consensus-eps-surprise-chart | Antero Midstrm Quote

Dividend

Adjusted distributable cash flow of $156.1 million, with coverage of 1.0x, was up from the prior-year quarter’s $142.7 million.

Second-quarter 2019 dividend of 30.75 cents per share has been approved by the board of directors. The dividend is likely to be paid on Aug 7 to its stockholders of record as of Jul 26.

Operational Performance

During second-quarter 2019, compression volumes were recorded at 218,020 million cubic feet (MMcf), up from the year-ago level of 141,819 MMcf. On a per-Mcf basis, compression fee was 19 cents, in line with the prior-year level.

In the second quarter, high pressure gathering volumes were 238,406 MMcf, up from the year-ago period’s 175,818 MMcf. On a per-Mcf basis, average gathering high pressure fee was 20 cents, higher than the prior-year level 19 cents.

Low pressure gathering volumes averaged 242,266 MMcf, up from the second-quarter 2018 figure of 180,268 MMcf. On a per-Mcf basis, average gathering low pressure fee was 33 cents, higher than the year-ago level of 32 cents.

Fresh water delivery volumes came in at 11,147 thousand barrels (MBbls), down from the prior-year level of 20,766 MBbls. On a per-barrel basis, average fresh water distribution fee was $3.90 in the second quarter, improving from the prior-year level of $3.78.

Operating Expenses

Total pro-forma operating expenses in the quarter were recorded at $138 million.

Balance Sheet

As of Jun 30, Antero Midstream had $7.8 million in cash and cash equivalents, and $2,526.3 million of long-term debt. As of the same date, it had a long-term debt-to-capitalization ratio of 38.9%.

Guidance

The company’s Sherwood 12 processing plant, having 200 MMcf/d of capacity, will likely come online in third-quarter 2019.

Zacks Rank and Stocks to Consider

Currently, Antero Midstream has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the energy sector are given below:

MPLX LP MPLX provides midstream infrastructures to upstream companies. Its bottom line in 2019 is expected to improve 23.6% from a year ago. The company has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cheniere Energy, Inc. LNG is an upstream energy company primarily engaged in liquefied natural gas-related businesses. Its bottom line in 2019 is expected to improve nearly 5% from a year ago. The company has a Zacks Rank #2.

Transportadora De Gas Sa Ord B TGS is a midstream energy firm. In the trailing four quarters, the company delivered average positive earnings surprise of 114%. The company has a Zacks Rank #1.

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