Enterprise Q1 Earnings Miss Estimates, Revenues Increase Y/Y

Enterprise Products Partners LP’s EPD first-quarter 2025 adjusted earnings per limited partner unit of 64 cents missed the Zacks Consensus Estimate of 69 cents. The bottom line also declined from the year-ago level of 66 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

However, total quarterly revenues of $15.4 billion beat the Zacks Consensus Estimate of $14.1 billion. The top line improved from $14.8 billion in the prior-year quarter.

The weak quarterly earnings can be primarily attributed to weak petrochemical margins and lower crude oil marine terminal volumes despite record natural gas processing and pipeline volumes.

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 7.9 million barrels per day (bpd), higher than the year-ago quarter’s 7.6 million bpd. Natural gas pipeline volumes amounted to 20.3 trillion British thermal units per day (TBtus/d), higher than 18.9 TBtus/d recorded in the year-ago quarter. Also, marine terminal volumes totaled 2 million bpd, lower than 2.3 million bpd in the year-ago period.

The gross operating margin at NGL Pipelines & Services increased from $1.3 billion in the year-ago quarter to $1.4 billion. This can be primarily attributed to higher processing volumes at its natural gas processing plant despite small MTM hedging losses.

Natural Gas Pipelines and Services’ gross operating margin increased to $357 million from $312 million in the year-ago quarter. The upside was primarily due to record transportation volumes and strong contributions from Permian and Texas systems, partially offset by higher MTM losses.

Crude Oil Pipelines & Services recorded a gross operating margin of $374 million, down from $411 million in the prior-year quarter. The decrease can be attributed to lower sales volumes and margins. Crude oil marine terminal volumes also declined sharply, while pipeline volumes remained flat.

The gross operating margin at Petrochemical & Refined Products Services was $315 million, down from $444 million in the first quarter of 2024. The segment was affected by lower margins in octane enhancement and propylene operations despite higher pipeline volumes.

Cash Flow

The distributable cash flow totaled $2.0 billion compared with $1.9 billion in the year-ago period, providing a coverage of 1.7X. Enterprise retained $842 million of distributable cash flow in the first quarter. It generated an adjusted free cash flow of $2.1 billion, flat year over year.

Financials                                              

In the reported quarter, Enterprise’s total capital investment was $1.1 billion.

As of March 31, 2025, the outstanding total debt principal was $31.9 billion, and consolidated liquidity amounted to approximately $3.6 billion.

Outlook

For 2025, EPD expects its growth capital expenditures to remain unchanged in the range of $4.0-$4.5 billion.

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

EPD’s Zacks Rank and Other Key Picks

Currently, EPD carries a Zacks Rank #2 (Buy).

Investors interested in the energy sector may look at some other top-ranked stocks like Archrock Inc. AROC, Kinder Morgan, Inc. KMI and Antero Resources Corporation AR. While Archrock presently sports a Zacks Rank #1 (Strong Buy), Kinder Morgan and Antero Resources carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. AROC provides natural gas contract compression services and generates stable fee-based revenues.

Archrock’s earnings beat estimates in three of the trailing four quarters and met once, delivering an average surprise of 8.81%.

Kinder Morgan is a leading midstream player in North America with a stable and resilient business model, largely driven by take-or-pay contracts, which ensure consistent earnings and facilitate reliable capital returns to shareholders. KMI operates one of the largest natural gas pipeline networks, positioning it to benefit from the projected increase in U.S. natural gas demand by 2030. 

Kinder Morgan’s earnings missed estimates in three of the trailing four quarters and met once, delivering an average negative surprise of 3.33%.

Antero Resources, one of the fastest-growing natural gas producers in the United States, boasts more than two decades of premium low-cost drilling inventory in the Appalachian basin, securing a strong production outlook. The company has a low net debt-to-capitalization ratio compared to its industry peers, which underscores its financial strength. Antero Resources is well-positioned to capitalize on the increasing demand for LNG, both in the United States and globally.

AR’s earnings beat estimates in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 39.16%.

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

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