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Enbridge (ENB) Earnings Surpass Estimates in Q4, Up Y/Y

Zacks Equity Research

Enbridge Inc. ENB delivered fourth-quarter 2018 earnings per share (EPS) of 49 cents, which beat the Zacks Consensus Estimate of 45 cents and improved from the year-ago quarter’s figure of 48 cents. Higher liquid delivery volumes from the Canadian Mainline and Wood Buffalo Extension Pipeline as well as contributions from new projects drove the quarterly numbers.

Enbridge Inc Price, Consensus and EPS Surprise

Enbridge Inc Price, Consensus and EPS Surprise | Enbridge Inc Quote

Total revenues in the quarter fell 13.8% year over year to $8,749 million. The sale of assets, particularly the Canadian natural gas gathering and processing business as well as the US Midstream assets, affected the topline.

Distributable Cash Flow (DCF)

Through the fourth quarter of 2018, the company managed to raise its DCF to C$1,863 million from C$1,741 million in the year-ago quarter.

Segment Analysis

Liquids Pipelines: Adjusted operating income in the segment amounted to C$1,728 million, up 16.6% from C$1,482 million in the year-ago quarter. Higher delivery of liquids from the Canadian Mainline and Wood Buffalo Extension Pipeline led to the improvement.

Gas Transmission and Midstream: Earnings in the segment amounted to C$952 million, down from C$1,020 million in fourth-quarter 2017. The sale of assets particularly the Canadian natural gas gathering and processing business as well as the US Midstream assets caused the downside.

Gas Distribution: The unit generated profit of C$452 million compared with C$450 million in the October-December 2017 quarter. Higher contributions from expansion projects commissioned as well as distribution charges drove the upside.

Green Power and Transmission: This segment delivered earnings of C$98 million, which fell from C$109 million in the prior-year quarter.

Energy Services: This segment generated income of C$73 million, against a loss of C$21 million in fourth-quarter 2017.

Outlook

The company expects to initiate online secured growth projects worth $22 billion through 2020. Enbridge raised dividend by 10% for 2019 and expects annual dividend to increase by another 10% in 2020. Considering the growth projects backlog, Enbridge expects to achieve DCF growth in the range of 5-7% beyond 2020.

Zacks Rank & Other Key Picks

Currently, Enbridge has a Zacks Rank #2 (Buy).

Other top-ranked players in the energy space include Evergy, Inc. EVRG, Canadian Solar Inc. CSIQ and Contura Energy CTRA, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Evergy, through its operating subsidiaries — Kansas City Power & Light Company (KCP&L) and Westar Energy, Inc. — provides clean, safe and reliable energy in Kansas as well as Missouri. The company reported average negative earnings surprise of 11.1% in the last four quarters.

Headquartered in Ontario, Canada, Canadian Solar operates as a vertically integrated manufacturer of silicon ingots, wafers, cells, solar modules (panels) and custom-designed solar power applications. The company is expected to witness year-over-year earnings growth of 67.5% in 2018.

Bristol-based Contura Energy is a mining company. The company reported average negative surprise of 17.9% in the trailing four quarters.

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