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Enbridge (ENB) Misses Earnings & Revenue Estimates in Q2

Zacks Equity Research

Leading energy infrastructure company Enbridge Inc. ENB reported lower-than-expected results in second-quarter 2017 results owing to higher operating expenses and accelerated maintenance works at the upstream operations of customers. Lower contribution from the Energy Services business segment also led to the discouraging numbers. The negatives were partially offset by higher throughput volumes from the Canadian Mainline and Lakehead System.

Earnings per share came in at 30 U.S. cents, lagging the Zacks Consensus Estimate of 35 U.S. cents. The bottom line also declined from the year-ago quarter’s 38 cents.

Total revenue in the quarter rose 35% year over year to US$8,261 million. The top line, however, failed to beat the Zacks Consensus Estimate of US$8,810 million.

Segment Analysis

Liquids Pipelines: Adjusted operating income at this segment was C$938 million, up almost 2% from C$922 million a year ago. Higher throughput volume from the Canadian Mainline and Lakehead System led to the improvement. This was offset partially by accelerated maintenance work at the upstream operations of customers.

Gas Pipelines and Processing: The segment reported earnings of C$667 million, skyrocketing from C$90 million recorded in second-quarter 2016. Significantly high volumes of processed natural gas contributed to the growth.

Gas Distribution: This business unit reported profit of C$153 million, up almost 110% from C$73 million recorded in the April–June 2016 quarter. Increased demand supported the improvement.

Green Power and Transmission: This segment saw earnings of C$51 million, more than 24% higher than C$40 million recorded in the prior-year quarter.

Energy Services: The segment reported loss of C$3 million, against a profit of C$47 million reported during second-quarter 2016.

Total Expenses

During the second quarter, the company reported total expenses of C$9,432 million, up 33% from C$7,145 million recorded in the April-to-June quarter of 2016.

Q2 Price Performance

Enbridge has lost 4.9% of its value during the quarter versus the 4% decline of its industry.

Zacks Rank & Key Stocks

Currently, Enbridge carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector are TransCanada Corporation TRP, Range Resources Corporation RRC and Global Partners LP GLP. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

TransCanada posted an average positive earnings surprise of 4.06% over the last four quarters.

Range Resources’ 2017 earnings are estimated to grow almost 116%.

Global Partners posted average positive earnings surprise of 415.30% over the last four quarters.

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