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Enbridge (ENB) Stock Slides 4% as Q1 Earnings Miss Estimates

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Enbridge Inc. ENB has declined 4% since it reported lower-than-expected first-quarter 2022 earnings on May 6, before the opening bell.

Enbridge reported first-quarter 2022 adjusted earnings per share of 66 cents, missing the Zacks Consensus Estimate of earnings of 67 cents. However, the bottom line increased from the year-ago quarter’s 62 cents.

Total quarterly revenues of $11,919 million increased from $9,352 million in the prior-year quarter and beat the Zacks Consensus Estimate of $10,371 million.

Enbridge Inc Price, Consensus and EPS Surprise

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

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

The weaker-than-expected earnings can be attributed to lower contributions from the company’s Energy Services business segment. This was offset partially by contributions from Liquids Pipelines and Gas Distribution and Storage operations.

Segmental Analysis

Enbridge conducts business through five segments — Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation and Energy Services.

Liquids Pipelines: The segment’s adjusted earnings before interest, income taxes, and depreciation and amortization (EBITDA) totaled C$2,217 million, up from C$1,881 million in the year-earlier quarter. Higher contributions from Mainline System, Gulf Coast and Mid-Continent System primarily aided the segment.

Gas Transmission and Midstream: The segment’s adjusted earnings totaled C$1,058 million, up from C$1,007 million in first-quarter 2021. Higher contributions from Canadian Gas Transmission and the U.S. Midstream aided the segment’s performance.

Gas Distribution and Storage: The unit generated a profit of C$674 million, up from C$646 million in the prior-year quarter, due to higher contributions from Enbridge Gas Inc.

Renewable Power Generation: The segment recorded earnings of C$160 million, up from C$154 million in the prior-year quarter, as the energy giant witnessed strong wind resources from offshore wind facilities in Canada and Europe.

Energy Services: The segment incurred a loss of C$71 million, narrower than a loss of C$75 million in first-quarter 2021.

Distributable Cash Flow (DCF)

In first-quarter 2022, Enbridge reported a DCF of C$3,072 million, representing an increase from C$2,761 million a year ago.

Balance Sheet

At the end of first-quarter 2022, Enbridge reported long-term debt of C$70,490 million. It had cash and cash equivalents of C$413 million. The current portion of long-term debt was C$4,379 million. ENB’s long-term debt to capitalization was 54.3% at the end of the first quarter.

Guidance

For 2022, Enbridge reaffirmed its guidance for EBITDA of C$15-C$15.6 billion and DCF per share of C$5.2-C$5.5.

Zacks Rank & Stocks to Consider

Enbridge currently carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include ConocoPhillips COP, Marathon Oil MRO and Occidental Petroleum OXY. While ConocoPhillips and Marathon Oil carry a Zacks Rank #2 (Buy), Occidental Petroleum sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Considering production and reserves, ConocoPhillips is one of the leading exploration and production players in the global market. COP has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

In 2022, ConocoPhillips is likely to see earnings growth of 141.6%.

Marathon Oil is a leading oil and natural gas exploration and production company. MRO has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

In 2022, Marathon Oil is likely to see earnings growth of 201.3%.

In the United States, Occidental Petroleum is among the largest oil producers. OXY has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

In 2022, Occidental Petroleum is likely to see earnings growth of 278.8%.


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