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MPLX LP (MPLX) Down 0.2% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for MPLX LP (MPLX). Shares have lost about 0.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is MPLX LP due for a breakout? 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 drivers.

MPLX Q3 Earnings & Revenues Beat Estimates

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.

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.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, MPLX LP has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 these revisions looks promising. It comes with little surprise MPLX LP has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

MPLX LP belongs to the Zacks Oil and Gas - Production and Pipelines industry. Another stock from the same industry, Williams Companies, Inc. The (WMB), has gained 5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Williams Companies, Inc. The reported revenues of $3.02 billion in the last reported quarter, representing a year-over-year change of +22.1%. EPS of $0.48 for the same period compares with $0.34 a year ago.

For the current quarter, Williams Companies, Inc. The is expected to post earnings of $0.46 per share, indicating a change of +18% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.7% over the last 30 days.

Williams Companies, Inc. The has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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