What's in the Cards for Brookfield This Earnings Season?

Brookfield Infrastructure Partners BIP is slated to report its first-quarter 2025 results on April 30, before market open. Its quarterly results are expected to reflect year-over-year growth in revenues and funds from operations (FFO) per share.

In the last reported quarter, this infrastructure company posted an FFO per share of 82 cents, beating the Zacks Consensus Estimate of 79 cents. Results reflected a year-over-year rise in revenues.

In the preceding four quarters, Brookfield’s FFO per share surpassed the Zacks Consensus Estimate on two occasions, missed once, and met on the remaining period, with the average beat being 2.20%. The graph below depicts this surprise history:

Brookfield Infrastructure Partners LP Price and EPS Surprise

Brookfield Infrastructure Partners LP price-eps-surprise | Brookfield Infrastructure Partners LP Quote

Factors at Play for Brookfield

Brookfield is a leading global infrastructure company that owns and operates a diversified portfolio of high-quality, long-life assets in the utilities, transport, midstream and data sectors across the Americas, Asia Pacific and Europe. These crucial infrastructure assets produce predictable and stable cash flows, which are likely to have helped the company deliver strong first-quarter total revenues.

In the first quarter, Midstream operations are likely to have benefited due to robust customer activity, new commercial contracts, and increased demand for long-term services, especially in the North American gas storage business.

The company's strategic pivot towards data infrastructure, including data centers, fiber optic networks and telecom towers, has positioned it to capitalize on the digitalization trend. The Data segment in the first quarter is likely to have gained from increased demand for data center services.

It is likely to have continued to secure meaningful proceeds from asset sales and add to its robust growth initiatives.

However, lower rates on its foreign exchange hedge contracts and high interest expenses during the first quarter are likely to have been a spoilsport for Brookfield.

Q1 Projections

The Zacks Consensus Estimate for first-quarter total revenues is pegged at $5.25 billion, indicating a rise of 1.2% from the year-ago reported number.

The Zacks Consensus Estimate for the Utilities segment’s adjusted EBITDA stands at $303.7 million, down from $316 million reported in the prior-year quarter. The consensus mark for the Transport segment’s adjusted EBITDA is pegged at $365.9 million, which indicates a decline from $401 million reported in the year-ago quarter.

For the first quarter, the Zacks Consensus Estimate for BIP’s Midstream segment adjusted EBITDA currently stands at $280.3 million, suggesting an increase from $256 million reported in the prior-year quarter. The consensus estimate for adjusted EBITDA from the Data Operations segment stands at $185.3 million, which indicates a rise from the year-ago quarter’s $130 million.

Before the first-quarter earnings release, the company’s activities were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised 3 cents downward to 81 cents in the past week. However, the figure suggests a 3.9% increase from the year-ago quarter’s tally.

What Our Quantitative Model Predicts for Brookfield

Our proven model does not conclusively predict a likely surprise in terms of FFO per share for BIP this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Brookfield currently has an Earnings ESP of 0.00% and carries a Zacks Rank of 4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader real estate investment trust (REIT) industry — Ventas VTR and Vornado Realty Trust VNO — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

VTR is slated to report quarterly numbers on April 30. VTR has an Earnings ESP of +0.18% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vornado is slated to report quarterly numbers on May 5. VNO has an Earnings ESP of +2.03% and carries a Zacks Rank of 3 at present. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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

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