Pembina Pipeline Corporation PBA reported third-quarter 2024 earnings per share of 44 cents, which missed the Zacks Consensus Estimate of 56. This underperformance was primarily due to weak delivery in the company’s Pipelines and facilities segments. PBA’s Pipelines volume for the third quarter of 2024 was reported at 2,738 thousand barrels of oil equivalent per day (mboe/d), below the consensus estimate of 2,754 mboe/d. Facilities volume for the same period was 810 mboe/d, missing the consensus expectation of 853 mboe/d. However, the bottom line improved from the year-ago quarter’s 42 cents.
Quarterly revenues of $1.4 billion decreased about 20.9% year over year. The metric also missed the Zacks Consensus Estimate of $1.5 billion. Operating cash flow increased approximately 43.2% to C$922 million. Adjusted EBITDA was C$1,019 million compared with C$1,021 million in the year-ago period. In the third quarter, PBA witnessed volumes of 3,892 thousand barrels of oil equivalent per day (mboe/d) compared with 3,658 mboe/d reported in the prior-year quarter.
Pembina Pipeline Corp. Price, Consensus and EPS Surprise
Pembina declared a cash dividend of 69 Canadian cents per share for the third quarter, subject to applicable law, on Dec. 16, 2024, to its shareholders of record as of Dec. 16.
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The Canada-based oil and gas storage and transportation company reported a strong financial position as of Sept. 30, 2024. The ratio of proportionately consolidated debt-to-adjusted EBITDA on a trailing twelve-month basis was 3.6 times. The figure was at the lower end of the company's targeted range, indicating contributions of two quarters from the Alliance/Aux Sable Acquisition.
PBA’s Segmental Information
Pipelines: Adjusted EBITDA of C$593 million increased about 0.3% from the year-ago quarter’s level. This growth was driven by improved asset performance, an increase in ownership following the Alliance/Aux Sable acquisition, higher demand for seasonal contracts and the reactivation of the Nipisi Pipeline in late 2023. However, the figure missed our projection of C$621.6 million.
Volume increased about 2.2% year over year to 2,738 mboe/d.
Facilities: Adjusted EBITDA of C$324 million increased from the year-ago quarter’s C$319 million, driven by the recognition of Aux Sable volumes following the Alliance/Aux Sable acquisition. The figure, however, missed our projection of C$328.9 million.
Volumes of 810 mboe/d increased about 0.9% year over year.
Marketing & New Ventures: Adjusted EBITDA of C$159 million was in line with the year-ago quarter’s level. The figure beat our projection of C$150.1 million.
Volumes of 344 mboe/d increased 34.9% year over year, driven by greater blending opportunities fueled by favorable price differentials. Natural gas liquids (NGL) sales volumes totaled 227 mboe/d in the third quarter, implying a 37% increase compared with the year-ago quarter’s level. This growth was due to higher sales of ethane, propane and butane, which were supported by the increased ownership stake in Aux Sable.
PBA’s Capital Expenditure & Balance Sheet
Pembina spent C$262 million as capital expenditure in the quarter under review compared with C$169 million a year ago.
As of Sept. 30, 2024, PBA had cash and cash equivalents worth C$104 million and C$11.2 billion in long-term debt. Debt to capitalization was 39.6%.
PBA’s Guidance
For 2024, Pembina expects its adjusted EBITDA to be in the range of C$4.23-C$4.33 billion, which is a narrower compared with the previous guidance of C$4.20-C$4.35 billion.
The company expects to maintain debt-to-adjusted EBITDA in the band of 3.4-3.6 times.
PBA currently carries a Zacks Rank #4 (Sell).
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Important Energy Earnings So Far
While it is early in the earnings season, there have been a few key energy releases so far. Let us glance through a couple of them.
Liberty Energy LBRT, the Denver-CO-based oil and gas equipment company, announced an adjusted net income of 45 cents per share, which missed the Zacks Consensus Estimate of 55 cents. This was primarily due to poor equipment and services execution and lower activity in the reported quarter. Additionally, the bottom line declined from the year-ago quarter’s reported figure of 86 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, LBRT’s board of directors announced a dividend of 8 cents per common share payable on Dec. 20, to its stockholders of record as of Dec. 6. This dividend represents a 14% increase from the prior regular quarterly dividend of 7 cents per share. In the quarter, Liberty returned $51 million to its shareholders through a combination of share repurchases and cash dividends.
Energy infrastructure provider, Kinder Morgan, Inc. KMI reported third-quarter adjusted earnings per share of 25 cents, which missed the Zacks Consensus Estimate of 27 cents. The bottom line was flat year over year. The weakness in quarterly results was caused by lower contributions from the Products Pipelines and CO2 business segments.
KMI also announced a quarterly cash dividend of 28.75 cents per share for the third quarter of 2024 (annualized dividend of $1.15), implying a 2% increase from the third-quarter 2023 level. The dividend is payable on Nov. 15, 2024, to its shareholders of record as of Oct. 31.
Schlumberger Limited SLB, a Houston, TX-based oil and gas equipment and services provider announced third-quarter earnings of 89 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 88 cents. The bottom line also increased from the year-ago quarter’s 78 cents. The strong quarterly earnings were primarily driven by broad-based earnings growth and margin expansion, especially in the Middle East, Asia and offshore North America. Additionally, cost optimization, greater adoption of digital solutions and contributions from long-cycle deepwater and gas projects played significant roles.
SLB reported a free cash flow of $1.81 billion in the third quarter. As of Sept. 30, the company had approximately $4.46 billion in cash and short-term investments. At the end of the quarter, it registered a long-term debt of $11.86 billion.
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