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Targa Resources Corp. TRGP reported first-quarter 2025 adjusted earnings of 91 cents per share, which missed the Zacks Consensus Estimate of $2.04 as Permian Basin volumes fell short of estimates.
The bottom line also decreased from the year-ago quarter’s level of $1.22. The year-over-year decrease in earnings can be attributed to increased operating expenses and product costs.
Total quarterly revenues of $4.6 billion were in line with the prior-year quarter’s level. However, the top line missed the Zacks Consensus Estimate of $5.3 billion. The weak quarterly revenues can be attributed to lower sale of commodities.
The company’s adjusted EBITDA for the first quarter totaled $1.2 billion, up from $966.2 million in the prior-year period.
Targa Resources, Inc. price-consensus-eps-surprise-chart | Targa Resources, Inc. Quote
On April 10, 2025, Targa raised its quarterly cash dividend to $1 per common share, or $4 on an annualized basis. Total cash dividends of approximately $217 million will be distributed on May 15, 2025, to its shareholders of record as of the close of business on April 30, 2025.
Targa repurchased 651,163 shares of its common stock in this quarter, spending approximately $124.9 million (at an average price of $191.86 per share). As of March 31, 2025, the company had $890.5 million remaining in its share repurchase program.
Targa also provided an update on its several ongoing projects. It informed that in its G&P segment, construction is being carried on at its 275 MMcf/d Pembrook II, East Pembrook, and East Driver plants in Permian Midland and its 275 MMcf/d Bull Moose II and Falcon II plants in Permian Delaware.
In TRGP’s L&T segment, construction is being carried on at its Delaware Express pipeline expansion, its 150 MBbl/d Train 11 and Train 12 fractionators in Mont Belvieu, and its GPMT LPG Export Expansion. The company expects its Pembrook II plant to begin operations by the third quarter of 2025.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Gathering and Processing: The segment recorded an operating margin of $602.2 million, up 8% from $556.4 million recorded in the year-ago period. The figure, however, missed the Zacks Consensus Estimate of $615 million.
The year-over-year improvement reflects higher Permian Basin volumes, which increased 11.3% year over year to an average of 6,006 MMcf/d but missed the consensus mark of 6,123 MMcf/d. The addition of the Roadrunner II plant, the Greenwood II plant and the Bull Moose plant also contributed to the outperformance.
Logistics and Transportation: This unit reflects TRGP’s downstream operations. Its operating margin of $646.7 million increased 22% year over year but missed the Zacks Consensus Estimate of $671 million. The year-over-year rise can be attributed to higher pipeline transportation and fractionation margin, and raised marketing margin. Pipeline transportation and fractionation volumes benefited from higher supply volumes, primarily due to the company’s Permian Gathering and Processing systems. The addition of train 9 & 10 and the in-service of the Daytona NGL Pipeline also contributed to the improvement.
TRGP’s fractionation volumes totaled 979.9 thousand barrels per day, up 23% from 797.2 recorded a year ago. The Zacks Consensus Estimate for the same was pegged at 1,084 thousand barrels per day. NGL pipeline transportation volumes rose 18% year over year, export volumes increased 2% and NGL sales declined 3% in the same period.
Targa incurred product costs of $3.3 billion, which increased marginally 1% from the year-ago quarter’s figure. At the same time, the company reported operating expenses of $303.6 million, up 9% from the year-ago quarter’s level of $278 million.
The company spent $594.5 million on growth capital programs compared with $685.8 million in the year-ago period.
As of March 31, 2025, TRGP had cash and cash equivalents of $151.4 million and long-term debt of $15.5 billion, with a debt-to-capitalization of around 85.8%.
For 2025, Targa projects its full-year adjusted EBITDA of $4.65-$4.85 billion. The company anticipates significant growth across its Permian G&P footprint, which is expected to drive record Permian, NGL pipeline transportation, fractionation, and LPG export volumes in 2025, surpassing the records set in 2024. The growth is expected toward the second half of 2025.
Targa’s estimated net growth capital expenditures for 2025 remain unchanged. The figure is projected to be between $2.6 billion and $2.8 billion. Net maintenance capital expenditures also remain unchanged at $250 million.
TRGP currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While we have discussed TRGP’s first-quarter results in detail, let us take a look at three other key reports in this space.
The energy infrastructure providerTC Energy Corporation TRP reported first-quarter 2025 adjusted earnings of 66 cents per share, which missed the Zacks Consensus Estimate of 70 cents. Moreover, the bottom line decreased from 92 cents in the year-ago period. This underperformance could be attributed to weak Power and Energy Solutions segment results.
TRP’s quarterly revenues of $2.5 billion also missed the Zacks Consensus Estimate by $18 million. The figure decreased 19.8% year over year.
As of March 31, 2025, TC Energy’s capital investments amounted to C$1.8 billion. TRP had cash and cash equivalents worth C$2 billion and long-term debt of C$45 billion, with a debt-to-capitalization of 61.1% as of the same date.
Oil and gas equipment and services provider TechnipFMC plc FTI reported first-quarter 2025 adjusted earnings of 33 cents per share, which missed the Zacks Consensus Estimate of 36 cents, primarily due to a 4.8% year-over-year increase in costs and expenses. However, the bottom line increased from the year-ago quarter’s reported profit of 22 cents, driven by improved performance in the Subsea segment.
The company’s revenues of $2.2 billion missed the Zacks Consensus Estimate by 1.1%. However, the top line increased from the year-ago quarter’s reported figure of $2 billion.
As of March 31, FTI had cash and cash equivalents worth $1.2 billion and long-term debt of $410.8 million, with a debt-to-capitalization of 11.8%.
Houston, TX-based oil and gas equipment and services provider Baker Hughes BKR reported first-quarter 2025 adjusted earnings of 51 cents per share, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also improved from the year-ago level of 43 cents.
As of March 31, 2025, Baker had cash and cash equivalents of $3,277 million. Baker had a long-term debt of $5,969 million at the end of the reported quarter, with a debt-to-capitalization of 25.9%.
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This article originally published on Zacks Investment Research (zacks.com).
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