MPLX LP (MPLX) Up 0.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for MPLX LP (MPLX). Shares have added about 0.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MPLX LP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
MPLX Q4 Earnings & Revenues Beat Miss Estimates
MPLX reported fourth-quarter earnings of $1.10 per unit, which beat the Zacks Consensus estimate of 95 cents. The bottom line also increased from the year-ago quarter’s 78 cents.
Total quarterly revenues of $2.97 billion surpassed the Zacks Consensus Estimate of $2.94 million and increased from the prior-year quarter’s $2.66 billion.
Strong quarterly results were primarily driven by higher contributions from both segments. A decline in total costs and expenses also contributed to the solid quarterly performance.
Segmental Highlights
MPLX’s adjusted EBITDA from the Logistics and Storage segment increased to $1.09 billion from $979 million a year ago. Increased rates and growth in throughput aided the segment. Total pipeline throughputs in the fourth quarter were 5.8 million barrels per day, up 3% from the year-ago period.
Adjusted EBITDA from the Gathering and Processing segment totaled $534 million, up from $475 million in the prior-year quarter. The segment was favored by increased gathering and processing throughput volumes. Gathering throughput volumes averaged 6.3 billion cubic feet per day (Bcf/d), implying a marginal 1% improvement from the year-ago period’s level. Natural gas processed volumes of 9.4 Bcf/d marked a 9% increase year over year.
Costs and Expenses
In fourth-quarter 2023, MPLX’s total costs and expenses were $1.59 billion, down from the year-ago quarter’s $1.6 billion. The decline in total costs and expenses can be attributed to lower operating expenses (including purchased product costs).
Cash Flow
Distributable cash flow in the quarter totaled $1.38 billion, providing 1.6X distribution coverage, up from $1.27 billion in the year-ago quarter.
Adjusted free cash flow in the quarter under review declined to $964 million from $1.09 billion in the corresponding period of 2022.
Balance Sheet
As of Dec 31, 2023, the partnership’s cash and cash equivalents were $1.05 billion. Its total debt amounted to $20.4 billion.
Outlook
For 2024, MPLX stated its capital spending outlook of $1.1 billion, which includes $950 million of growth capital and $150 million of maintenance capital. The metric indicates an increase from the $838 million reported in 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, MPLX LP has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, MPLX LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
MPLX LP is part of the Zacks Oil and Gas - Production and Pipelines industry. Over the past month, Kinder Morgan (KMI), a stock from the same industry, has gained 1.4%. The company reported its results for the quarter ended December 2023 more than a month ago.
Kinder Morgan reported revenues of $4.04 billion in the last reported quarter, representing a year-over-year change of -11.8%. EPS of $0.28 for the same period compares with $0.31 a year ago.
For the current quarter, Kinder Morgan is expected to post earnings of $0.32 per share, indicating a change of +6.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Kinder Morgan. Also, the stock has a VGM Score of B.
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