Enterprise Products Q1 Bottom-Line Misses By A Whisker: Details

Enterprise Products Partners L.P. EPD reported a first-quarter fiscal 2024 sales growth of 18.6% year-over-year to $14.76 billion, beating the consensus of $14.23 billion. 

Adjusted EBITDA rose to $2.47 billion from $2.23 billion in the prior year quarter, and the margin contracted by 192 bps to 16.7%.

EPS was 66 cents, up from 63 cents in first-quarter 2023, missing the consensus of 67 cents.

Distributable Cash Flow was $1.915 billion for the quarters compared to $1.938 billion a year ago. Adjusted cash flow provided by operating activities was $2.147 billion compared to $2.022 billion in the first quarter of 2023.

“Our earnings growth in the first quarter of 2024 was primarily driven by contributions from new assets placed into service during the second half of 2023 in our NGL Pipeline & Services segment, a 17 percent increase in net marine terminal volumes attributable to growing international demand for U.S. energy, and higher sales volumes and margins in our octane enhancement business,” commented A. J. “Jim” Teague, co-chief executive officer of Enterprise’s general partner.

“Near the end of the first quarter, we expanded our Permian natural gas processing infrastructure with the start of operations at our Leonidas plant in the Midland Basin and our Mentone 3 plant in the Delaware Basin. Both facilities have a design capacity to process more than 300 MMcf/d of natural gas and extract over 40 MBPD of NGLs,” stated Teague.

Adjusted total gross operating margin contracted by 189 bps to 16.9%. The gross operating margin from the NGL Pipelines & Services segment was $1.3 billion compared to $1.2 billion a year ago. The crude Oil Pipelines & Services segment increased to $411 million from $397 million.

Natural Gas Pipelines & Services gross operating was $312 million versus $314 million YoY; Petrochemical & Refined Products Services increased 6% Y/Y.

In the quarter, capital investments came in at $1.1 billion, including sustaining capital expenditures of $180 million.

The company repurchased ~$40 million of its common units for the quarter, resulting in utilizing 48% of its authorized $2 billion common unit buyback program.

The company expects organic growth capital investments in the range of $3.25 billion to $3.75 billion in 2024 and 2025. Sees sustaining capital expenditures to be ~$550 million in 2024.

Price Action: EPD shares are trading lower by 2.57% at $27.86 at the last check Tuesday.