MPLX Misses Q4 Earnings Estimates, Hikes 2023 Capital Budget
MPLX LP MPLX reported fourth-quarter 2022 earnings of 78 cents per unit, missing the Zacks Consensus Estimate of 84 cents. The bottom line was in line with the year-ago quarter’s 78 cents.
Total quarterly revenues of $2,662 million surpassed the Zacks Consensus Estimate of $2,553 million. However, the top line declined from the prior-year quarter’s $2,734 million.
Lower-than-expected quarterly earnings resulted from lower contributions from gathering and processing operations. The negatives were partially offset by lower contributions from gathering and processing operations, and declining costs and expenses.
MPLX LP Price, Consensus and EPS Surprise
MPLX LP price-consensus-eps-surprise-chart | MPLX LP Quote
MPLX’s adjusted EBITDA from the Logistics and Storage segment increased from $934 million a year ago to $979 million. Higher pipeline tariff rates and contributions from joint ventures aided the segment. Total pipeline throughputs for the fourth quarter were 5.6 million barrels per day (bpd), almost flat from the year-ago period.
Adjusted EBITDA from the Gathering and Processing segment was $475 million, down from $511 million in the prior-year quarter. The segment was affected by a decline in natural gas liquid prices. Gathered volumes averaged 6.2 billion cubic feet per day (Bcf/d), suggesting a 14% increase from the year-ago period. Processed volumes of 8.6 Bcf/d marked a 1% increase from the year-ago quarter.
Costs and Expenses
For fourth-quarter 2022, total costs and expenses of MPLX were $1,602 million, down from the year-ago quarter’s $1,678 million.
Distributable cash flow attributable to MPLX for fourth-quarter 2022 was $1,270 million, providing 1.6X distribution coverage, up from $1,207 million in the year-ago quarter.
Distribution per unit was 77.5 cents for the reported quarter, indicating a 10% increase from the prior-year quarter’s distribution. The distribution will be paid out on Feb 14, 2023, to common unitholders of record as of Feb 6, 2023.
Adjusted free cash flow for the quarter under review declined to $1,093 million from $1,103 million in the corresponding period of 2021.
As of Dec 31, 2022, the partnership’s cash and cash equivalents were $238 million. Its total debt amounted to $19.8 billion.
For 2023, MPLX stated its capital spending outlook of $950 million, which includes $800 million of growth capital and $150 million of maintenance capital. The metric suggests a significant improvement from the $855 million reported in 2022.
Zacks Rank & Stocks to Consider
MPLX currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at stocks like RPC Inc. RES, sporting a Zacks Rank #1 (Strong Buy), and Halliburton Company HAL and Valero Energy Corporation VLO, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RPC reported adjusted earnings of 41 cents per share in the fourth quarter, beating the Zacks Consensus Estimate of 30 cents. The strong quarterly results were backed by higher activity levels in all the service lines and rising equipment utilization.
RES is expected to see earnings growth of 67.7% in 2023. As of Dec 31, RPC had cash and cash equivalents of $126.4 million, up sequentially from $73.2 million. Nonetheless, the company managed to maintain a debt-free balance sheet.
Halliburton reported a fourth-quarter 2022 adjusted net income per share of 72 cents, surpassing the Zacks Consensus Estimate of 67 cents. The outperformance reflects stronger-than-expected profit from both its divisions.
HAL is expected to see earnings growth of 43.7% in 2023. In more good news for investors, Halliburton raised its quarterly dividend by 33.3% to 16 cents per share (or 64 cents per share annualized).
Valero reported fourth-quarter 2022 adjusted earnings of $8.45 per share, beating the Zacks Consensus Estimate of $7.45 per share. The strong quarterly results have been driven by increased refinery throughput volumes and a higher refining margin.
Valero can benefit from the Gulf Coast export volumes as fuel demand recovery gets support from Asia economies. The Gulf Coast contributed 59.4% to the total throughput volume in the fourth quarter of 2022.
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