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Antero Midstream Corporation (AM) Down 9.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Antero Midstream Corporation (AM). Shares have lost about 9.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Antero Midstream Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Antero Midstream Q4 Earnings & Revenues Beat Estimates

Antero Midstream reported fourth-quarter 2022 adjusted earnings per share of 20 cents, beating the Zacks Consensus Estimate of 17 cents. The bottom line is in line with the year-ago quarter’s earnings of 20 cents.

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Total quarterly revenues of $242 million surpassed the Zacks Consensus Estimate of $237 million. The top line increased from $216 million in the year-ago quarter.

The strong quarterly results were primarily driven by higher freshwater delivery volumes and increased average freshwater distribution fees.

Operational Performance

In fourth-quarter 2022, average daily compression volumes were 2,945 million cubic feet (MMcf/d), up from the year-ago level of 2,843 MMcf/d. On a per-Mcf basis, the compression fee was 21 cents, improving from the prior-year quarter’s 20 cents.

In the reported quarter, high-pressure gathering volumes totaled 2,762 MMcf/d, down from the year-ago period’s 2,915 MMcf/d. On a per-Mcf basis, the average gathering high-pressure fee was 21 cents, improving from the prior-year level of 20 cents.

Low-pressure gathering volumes averaged 3,070 MMcf/d, up from the fourth-quarter 2021 figure of 2,961 MMcf/d. On a per-Mcf basis, the average gathering low-pressure fee was 34 cents, higher than the prior-year level of 33 cents.

Freshwater delivery volumes were at 111 MBbls/d, up 39% from the prior-year level of 80 MBbls/d. On a per-barrel basis, the average freshwater distribution fee was $4.09 per barrel in the reported quarter, up from $3.97.

Operating Expenses

In fourth-quarter 2022, direct operating expenses of Antero Midstream were $48.3 million, up from $38.8 million a year ago.

Antero Midstream’s total operating expenses in the quarter were $97.4 million, increasing from the fourth-quarter 2021 levels of almost $88 million.

Balance Sheet

As of Dec 31, Antero Midstream had no cash and cash equivalents. As of the same date, Antero Midstream had $3,361.3 million of long-term debt.

Outlook

For 2023, Antero Midstream expects a net income of $340-$380 million, indicating an increase from the $326.2 million reported in 2022.

The company expects an adjusted net income of $395-$435 million and an adjusted EBITDA of $930-$970 million for the year.

Antero Resources disclosed a capital budget of $195-$215 million for 2023. The midstream operator anticipates free cash flow before dividends of $515-$555 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

The consensus estimate has shifted 5.92% due to these changes.

VGM Scores

At this time, Antero Midstream Corporation has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Antero Midstream Corporation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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