Yahoo Finance MPLX LP (MPLX) Down 3.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for MPLX LP (MPLX). Shares have lost about 3.2% 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 catalysts.
MPLX Q1 Earnings & Revenues Lag on Lower Throughput Volumes
MPLX reported first-quarter earnings of 98 cents per unit, which missed the Zacks Consensus Estimate of 99 cents. The bottom line, however, increased from the year-ago quarter’s figure of 91 cents.
Total quarterly revenues of $2.85 billion missed the Zacks Consensus Estimate of $2.93 million. However, the top line increased from the prior-year quarter’s level of $2.71 billion.
The underperformance can be attributed to decreased total pipeline throughputs and higher operating expenses.
Segmental Highlights
MPLX’s adjusted EBITDA from the Logistics and Storage segment increased to $1.1 billion from $1.03 billion a year ago. Increased rates and growth from equity affiliates aided the segment. However, total pipeline throughputs in the first quarter were 5.3 million barrels per day, down 6% from the year-ago level.
Adjusted EBITDA from the Gathering and Processing segment totaled $537 million, up from $493 million in the prior-year quarter. The segment benefited from higher throughput volumes. A non-cash gain of $20 million related to the acquisition of the remaining interest of a Utica joint venture also aided the segment.
Gathering throughput volumes averaged 6.2 billion cubic feet per day (Bcf/d), implying a marginal decline of 2% from the year-ago period’s level. Natural gas processed volumes of 9.4 Bcf/d marked a 9% increase from the prior-year quarter’s level.
Costs and Expenses
MPLX’s total costs and expenses were $1.6 billion, up from the year-ago quarter’s reported actuals of $1.5 billion. The increase can be attributed to higher operating expenses (including purchased product costs).
Cash Flow
Distributable cash flow in the quarter totaled $1.37 billion, providing 1.6X distribution coverage. The figure increased from $1.27 billion in the year-ago quarter.
Adjusted free cash flow declined to $294 million from $1 billion in the corresponding period of 2023.
Balance Sheet
As of Mar 31, 2024, the partnership’s cash and cash equivalents were $385 million. Its total debt amounted to $20.44 billion.
Outlook
For 2024, MPLX expects capital spending to amount to $1.1 billion, including $950 million of growth capital and $150 million of maintenance capital. The estimated figure indicates an increase from $838 million reported in 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, MPLX LP has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions 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 3.7%. The company reported its results for the quarter ended March 2024 more than a month ago.
Kinder Morgan reported revenues of $3.84 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $0.34 for the same period compares with $0.30 a year ago.
For the current quarter, Kinder Morgan is expected to post earnings of $0.26 per share, indicating a change of +8.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.8% over the last 30 days.
Kinder Morgan 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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