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Enbridge (ENB) Earnings Beat Estimates in Q1, Decline Y/Y

Zacks Equity Research

Enbridge Inc. ENB delivered first-quarter 2019 earnings per share (EPS) of 61 cents, which beat the Zacks Consensus Estimate of 52 cents but declined from the year-ago quarter’s 82 cents.

Total revenues in the quarter fell 24% year over year to $9,670 million.

The better-than-expected earnings results were supported by higher throughput in the Mainline System and increased volumes of distributed gas. The positives were partially offset by lower contributions from Canadian gas transmission activities.

Distributable Cash Flow (DCF)

Through the first quarter of 2019, the company raised its DCF to C$2,758 million from C$2,312 million a year ago.

Segment Analysis

Enbridge conducts business through five segments:Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution, Renewable Power Generation and Transmission, and Energy Services. The midstream energy provider added that the Green Power and Transmission business unit has been renamed as Renewable Power Generation and Transmission. Notably, the new segment came into being on Jan 1, 2019.

Liquids Pipelines: Adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA) at the segment amounted to C$1,729 million, up 6.3% from C$1,627 million in the year-earlier quarter. Higher throughput in the Mainline System and increased spot volumesfrom the Gulf Coast and Mid-Continent System primarily drove the upside.

Gas Transmission and Midstream: Adjusted EBITDAat the segment totaled C$1,040 million, down from C$1,046 million in first-quarter 2018. Lower contributions from Canadian gas transmission activities and U.S. midstream business led to the downside.

Gas Distribution: The unit generated adjusted profit of C$693 million compared with C$646 million in the March quarter of 2018. Higher volumes of distributed gas volumes along with the increase in the number of active customers backed the improvement.

Renewable Power Generation and Transmission: This segment delivered adjusted earnings of C$123 million, down from C$139 million in the prior-year quarter. The wind farms in the United States, which experienced weaker wind resources, mainly led to the decline.

Energy Services: This segment generated adjusted income of C$176 million, up from C$22 million in first-quarter 2018.

Outlook

The company continues to expect 2019 DCF in the band of $4.30 to $4.60.

Enbridge Inc Price, Consensus and EPS Surprise

 

Enbridge Inc Price, Consensus and EPS Surprise

Enbridge Inc price-consensus-eps-surprise-chart | Enbridge Inc Quote

 

Zacks Rank and Key Picks

Enbridge currently carries a Zacks Rank #3 (Hold). Meanwhile, three better-ranked players in the energy space are Enterprise Products Partners LP EPD, Murphy Oil Corporation MUR and Anadarko Petroleum Corporation APC. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.      

Enterprise Products has average positive earnings surprise of 17% for the last four quarters.

Murphy Oil is likely to witness earnings growth of 26.2% and 63.8%, through 2019 and 2020, respectively.

Anadarko Petroleum has average positive earnings surprise of 6.6% for the last four quarters.

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