Crestwood Equity Partners LP (CEQP) Up 4.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Crestwood Equity Partners LP (CEQP). Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Crestwood Equity Partners LP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Crestwood Q2 Earnings Beat on Storage and Logistics
Crestwood Equity Partners LP reported second-quarter 2023 adjusted earnings of $1.16 per unit, surpassing the Zacks Consensus Estimate of 26 cents. The bottom line jumped from the year-ago quarter’s profit of 14 cents per unit.
Total quarterly revenues declined to $1,021.2 million from $1,448 million in the prior-year quarter. The top line missed the Zacks Consensus Estimate of $1,194.3 million.
Strong quarterly earnings were owing to fantastic contributions from the Storage and Logistics business unit. This was hurt partially by lower gas-gathering volumes from the Williston Basin.
Segmental Performance
Gathering and Processing North: The segment of Crestwood generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $136.7 million, down from $152.7 million in the year-ago quarter. Our estimate for the business unit also suggests a year-over-year decline. Operating and maintenance expenses decreased to $26.4 million from $27.5 million.
Total gas gathering volumes in the quarter were 330.6 million cubic feet per day (MMcf/d), down from 348.6 MMcf/d a year ago. Gathering volumes decreased in the Williston Basin and the Powder River Basin. Total processing volumes fell to 349.8 MMcf/d from the year-ago level of 374.4 MMcf/d.
Gathering and Processing South: The segment generated earnings of $35.2 million, up from $24.8 million reported in the year-ago quarter. Operating and maintenance expenses increased to $15.2 million from $7.6 million.
Total gas gathering volumes in the quarter were 535 MMcf/d, down from 691 MMcf/d a year ago. Total processing volumes increased to 443.8 MMcf/d from the year-ago level of 220.2 MMcf/d.
Storage and Logistics: The segment generated earnings of $142 million, which jumped from $9.5 million in the year-ago quarter. Our estimate also reflects a significant year-over-year rise. Operating and maintenance expenses of $11.6 million increased marginally from the year-ago quarter’s $11.5 million.
Expenses
Total operating expenses and others increased to $161.1 million from $160.9 million in the year-ago period.
Operation and maintenance costs increased to $53.2 million from $46.6 million a year ago. However, general and administrative expenses declined to $25 million from $26.5 million.
Cash Flow
Distributable cash flow attributable to CEQP common in the second quarter was $86.4 million, down from $108.1 million in the year-ago period. Our estimate for the metric was $96.7 million.
Free cash flow after distributions was $18.3 million deficit in the June quarter compared with $1.3 million in the year-ago period.
Balance Sheet
As of Jun 30, 2023, Crestwood had $7.7 million in cash. Total debt was $3,259.1 million at the second-quarter end.
Guidance
For this year, the partnership projects adjusted EBITDA in the band of $780 million to $860 million. However, due to the lower commodity pricing environment, Crestwood believes that the metric will be within the lower half of the range.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -24.35% due to these changes.
VGM Scores
At this time, Crestwood Equity Partners LP has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Crestwood Equity Partners LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Crestwood Equity Partners LP (CEQP) : Free Stock Analysis Report
