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MPLX Beats Q3 Earnings Estimates, Hikes Distribution by 10%

MPLX LP MPLX units have gained 2.5% after reporting strong third-quarter 2022 earnings on Nov 1, before the opening bell. The upward price movement can be attributed to the company’s dividend hike cheering investors.

Q3 Results

MPLX reported third-quarter earnings of 96 cents per unit, beating the Zacks Consensus Estimate of 81 cents. The bottom line improved from the year-ago quarter’s 74 cents.

Total quarterly revenues of $3,401 million surpassed the Zacks Consensus Estimate of $2,758 million. The top line also increased from the prior-year quarter’s $2,559 million.

The strong quarterly results were supported by higher contributions from logistics and storage operations, and the gathering and processing business.

MPLX LP Price, Consensus and EPS Surprise

 

MPLX LP Price, Consensus and EPS Surprise
MPLX LP Price, Consensus and EPS Surprise

MPLX LP price-consensus-eps-surprise-chart | MPLX LP Quote

Segmental Highlights

MPLX’s adjusted EBITDA from the Logistics and Storage segment increased from $904 million a year ago to $969 million. Higher pipeline throughputs aided the segment. Total pipeline throughputs for the third quarter were 5.8 million barrels per day (bpd), marking a 5% increase from the year-ago period.

Adjusted EBITDA from the Gathering and Processing segment was $502 million, up from $485 million in the prior-year quarter. The segment benefited from a spike in natural gas liquid prices. Gathered volumes averaged 6.1 billion cubic feet per day (Bcf/d), suggesting a 12% increase from the year-ago period. Processed volumes of 8.5 Bcf/d marked a 2% increase from the year-ago quarter.

Costs and Expenses

For third-quarter 2022, total costs and expenses of MPLX were $1,727 million, up from the year-ago quarter’s $1,528 million.

Cash Flow

Distributable cash flow attributable to MPLX for third-quarter 2022 was $1,264 million, providing 1.6X distribution coverage, up from $1,191 million in the year-ago quarter.

Distribution per unit was 77.5 cents for the reported quarter, indicating a 10% increase from the prior distribution of 70.5 cents. The distribution will be paid out on Nov 22, 2022, to common unitholders of record as of Nov 15, 2022.

Adjusted free cash flow for the quarter under review declined to $777 million from $1,055 million in the corresponding period of 2021.

Balance Sheet

As of Sept 30, 2022, the partnership’s cash and cash equivalents were $121 million. Its total debt amounted to $19.8 billion.

Zacks Rank & Stocks to Consider

MPLX currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following stocks that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

RPC Inc. RES reported adjusted earnings of 32 cents per share in the third quarter, beating the Zacks Consensus Estimate of 25 cents. The strong quarterly results were backed by higher activity levels in all the service lines and improved pricing.

With no debt load, RPC had cash and cash equivalents of $35.9 million at the third-quarter end. This reflects the company’s strong balance sheet that provides it with massive financial flexibility. It allows RPC to remain afloat during tough times.

Patterson-UTI Energy PTEN reported a third-quarter 2022 adjusted net profit of 28 cents per share, beating the Zacks Consensus Estimate of a profit of 19 cents. The outperformance was driven by solid segmental performances.

In good news for investors, Patterson-UTI doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022, to shareholders of record as of Dec 1, 2022. PTEN also increased its share repurchase authorization to $300 million.

Halliburton Company HAL reported a third-quarter 2022 adjusted net income per share of 60 cents, surpassing the Zacks Consensus Estimate of 56 cents. The outperformance reflected stronger-than-expected profit from its divisions.

Halliburton expects international activity to gain momentum throughout the globe. The company’s state-of-the-art portfolio, selective contract wins and balanced geographic mix will help maximize profit from the upcycle. As far as North America is concerned, HAL sees continued revenue growth in a tight market.


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