Enterprise Q3 Earnings and Revenues Miss on Lower Sales Margins

Enterprise Products Partners LP's EPD shares have lost 0.95% since reporting weak quarterly earnings on Oct. 30, 2025.

The leading North American midstream energy services provider reported third-quarter 2025 adjusted earnings per limited partner unit of 61 cents, which missed the Zacks Consensus Estimate of 67 cents. The bottom line also declined from the year-ago level of 65 cents.

However, total quarterly revenues of $12 billion missed the Zacks Consensus Estimate of $12.6 billion. The top line declined from $13.8 billion in the prior-year quarter.          

The weak quarterly earnings can be primarily attributed to overall lower sales and processing margins, along with MTM hedging losses, which offset the gains from volume growth.

Enterprise Products Partners L.P. Price, Consensus and EPS Surprise

Enterprise Products Partners L.P. price-consensus-eps-surprise-chart | Enterprise Products Partners L.P. Quote

Segmental Performance

Pipeline volumes in NGL, crude oil, refined products and petrochemicals totaled 8.4 million barrels per day (bpd), higher than the year-ago quarter’s 7.8 million bpd. Natural gas pipeline volumes amounted to 21 trillion British thermal units per day (TBtus/d), higher than 19.5 TBtus/d recorded in the year-ago quarter. Marine terminal volumes totaled 2 million bpd, lower than 2.1 million bpd in the year-ago period.

The gross operating margin at NGL Pipelines & Services remained unchanged at $1.3 billion. This can be primarily attributed to higher natural gas processing volumes at its natural gas processing plant and mark-to-market (MTM) gains from hedging activities. The total equity NGL-equivalent production volumes were also higher compared with the prior-year quarter.

Natural Gas Pipelines and Services’ gross operating margin decreased to $339 million from $349 million in the third quarter of 2024. The downside can be primarily attributed to MTM hedging losses from the partnership’s natural gas marketing business.

Crude Oil Pipelines & Services recorded a gross operating margin of $371 million, down from $401 million in the prior-year quarter. The decrease was mainly due to lower sales margins from marketing activities within Texas crude oil pipelines, related terminals and other marketing activities. Crude oil marine terminal volumes experienced a decline, while crude oil pipeline volumes witnessed a modest increase.

The gross operating margin at Petrochemical & Refined Products Services was $370 million, compared with $363 million in the third quarter of 2024. The increase was aided by higher pipeline volumes and marine terminal volumes in the segment. This was partially offset by lower sales margins in octane enhancement and higher operating expenses in the propylene business.

Cash Flow

The distributable cash flow totaled $1.83 billion compared with $1.96 billion in the year-ago period, providing a coverage of 1.5X. Enterprise retained $635 million of distributable cash flow in the third quarter. It generated an adjusted free cash flow of $96 million, down from $943 million in the year-ago quarter.

Financials                                              

In the reported quarter, Enterprise’s total capital investment was $1.96 billion.

As of Sept. 30, 2025, the outstanding total debt principal was $33.9 billion, and consolidated liquidity amounted to approximately $3.6 billion.

Outlook

For 2025, EPD expects growth capital expenditures to remain at approximately $4.5 billion. Further, growth capital expenditures for 2026 are expected to be in the range of $2.2-$2.5 billion.

The company expects sustaining capital expenditure to be approximately $525 million in 2025.

EPD’s Zacks Rank and Key Picks

EPD currently has a Zacks Rank #4 (Sell).

Some top-ranked stocks from the energy sector are Oceaneering International OII, Canadian Natural Resources Ltd. CNQ and FuelCell Energy FCEL. While Oceaneering International currently sports a Zacks Rank #1 (Strong Buy), Canadian Natural Resources and FuelCell carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.

Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil. It has delivered 25 consecutive years of dividend increases, one of the longest streaks among global oil producers. 

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research