Crestwood Equity Misses Q2 Sales Estimates, Expects FY23 Adj. EBITDA At Lower Half Of Guided Range

Crestwood Equity Partners LP CEQP reported Q2 FY23 revenues of $1.02 billion missing the consensus of $1.19 billion.

EPS of $1.16 beat the estimate of $0.26.

Adjusted EBITDA declined 2% Y/Y to $176 million.

Gathering and Processing North segment EBITDA declined 10% Y/Y to $137 million due to lower commodity prices impacting Arrow's percent-of-proceeds contracts.

Gathering and Processing South segment EBITDA rose to $35 million from $25 million a year ago, led by continued producer development and the contributions of Sendero Midstream Partners LP and Crestwood Permian Basin Holdings LLC. 

Also, Storage & Logistics segment EBITDA rose 185% Y/Y to $13 million in the quarter.

Distributable cash flow (DCF) to common unitholders stood at $86 million in the quarter.

The company announced a cash distribution of $0.655 per common unit, payable on August 14, 2023, to unitholders of record as of August 7, 2023.

Crestwood spent $36 million in growth capital projects, mainly in the Williston and Delaware basins. 

As of June 30, 2023, Crestwood had $3.3 billion of total debt outstanding, with a leverage ratio of 4.25x.

Outlook: CEQP now expects FY23 adjusted EBITDA to be towards the lower half of the previously guided range of $780 million to $860 million.

The company expects weaker commodity prices relative to its original budget for the rest of the year. 

The company expects the leverage ratio to be within its original guidance range of 3.7x to 4.1x by the end of 2023. 

CEQP continues to expect growth capital investments of $135 million-$155 million.

Price Action: CEQP shares are trading lower by 4.57% at $27.80 on the last check Tuesday.