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DCP Midstream (DCP) Slides 6.4% as Q1 Earnings Miss Estimates

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DCP Midstream, LP DCP has declined 6.4% since it reported lower-than-expected first-quarter 2022 earnings on May 4, after the closing bell.

DCP Midstream reported first-quarter adjusted earnings of 96 cents per unit, missing the Zacks Consensus Estimate by a penny. The bottom line increased from the year-ago quarter’s profit of 19 cents per unit.

Total quarterly revenues of $3,375 million missed the Zacks Consensus Estimate of $4,284 million. However, the top line increased from $2,318 million in the year-ago quarter.

DCP Midstream Partners, LP Price, Consensus and EPS Surprise

DCP Midstream Partners, LP Price, Consensus and EPS Surprise
DCP Midstream Partners, LP Price, Consensus and EPS Surprise

DCP Midstream Partners, LP price-consensus-eps-surprise-chart | DCP Midstream Partners, LP Quote

Increased operating costs and expenses hurt DCP Midstream’s earnings. This was offset partially by higher NGL pipeline throughput volumes.

Operations

Logistics and Marketing

The segment recorded adjusted EBITDA of $212 million in the first quarter, up from the year-ago period’s $155 million. Higher NGL pipeline throughput volumes aided the segment.

The average NGL pipeline throughput in the quarter was 682 thousand barrels per day (Mbpd), higher than the year-ago quarter’s 578 Mbpd. Fractionator throughputs were recorded at 53 Mbpd, up from 43 Mbpd.

Gathering and Processing

The segment reported adjusted EBITDA of $278 million in the first quarter, up from $156 million in the year-ago quarter. Increased wellhead volumes aided the segment.

Average natural gas wellhead volumes in the quarter increased to 4,110 million cubic feet per day (MMcf/d) from the year-ago period’s 4,077 MMcf/d. NGL gross production totaled 402 Mbpd, up from 361 Mbpd.

Total Expenses

Purchases and related costs significantly increased year over year in the quarter under review. Operating and maintenance expenses rose to $152 million from $149 million in the first quarter of 2021.

Total operating costs and expenses in the first quarter were $3,365 million, up from the year-ago quarter’s figure of $2,315 million.

Financials

In first-quarter 2022, total expansion capital expenditures and equity investments were $9 million. Sustaining capital in the quarter was $13 million. DCP generated an excess free cash flow of $247 million in the reported quarter.

At the end of the first quarter, the partnership reported long-term debt of $4,838 million. Cash and cash equivalents were $1 million. It had current debt of $505 million, reflecting a debt to capitalization of 47.8%.

Zacks Rank & Other Stocks to Consider

DCP Midstream currently carries a Zacks Rank #2 (Buy). Other prospective players in the energy space include ConocoPhillips COP, Marathon Oil MRO and Occidental Petroleum OXY. While ConocoPhillips and Marathon Oil carry a Zacks Rank #2, Occidental Petroleum sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Considering production and reserves, ConocoPhillips is one of the leading exploration and production players in the global market. COP has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

In 2022, ConocoPhillips is likely to see earnings growth of 141.6%.

Marathon Oil is a leading oil and natural gas exploration and production company. MRO has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

In 2022, Marathon Oil is likely to see earnings growth of 201.3%.

In the United States, Occidental Petroleum is among the largest oil producers. OXY has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

In 2022, Occidental Petroleum is likely to see earnings growth of 278.8%.


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