News

USA Compression Partners USAC reported a third-quarter adjusted net profit of 13 cents per common unit, which missed the Zacks Consensus Estimate of 20 cents due to higher total costs and other expenses. However, the metric improved from the year-ago quarter's adjusted net profit of 9 cents per common unit on the back of a higher-than-expected revenue-generating capacity.

The largest independent provider of natural gas compression services generated revenues of $240 million, improving 10.5% from the year-ago quarter’s level and beating the Zacks Consensus Estimate of $238 million. This revenue growth was due to a 7.7% increase in Contract operations and a huge 162.5% jump in Related party revenues.

USA Compression Partners, LP Price, Consensus and EPS Surprise

USA Compression Partners, LP price-consensus-eps-surprise-chart | USA Compression Partners, LP Quote

Adjusted EBITDA increased 11.9% to $145.7 million and surpassed our estimate of $142.5 million.

Distributable cash flow decreased from $86.6 million in the prior-year quarter to $71.6 million. The company reported a net income worth $19.3 million compared with $20.9 million a year ago.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The oil and gas equipment and services company reported net operating cash flow of $48.5 million in the third quarter, down from the prior-year quarter’s $50.1 million.

Adjusted gross operating margin of 65.9% marked an increase from the year-ago period’s 65.5%.

The company’s revenue-generating capacity increased 6.1% year over year to 3.6 million horsepower, surpassing the Zacks Consensus Estimate of 3.4 million horsepower by 0.1%. Further, the average monthly revenue per horsepower rose to $20.60 from $19.10 in the third quarter of 2023. The figure was below our estimate of $20.87.

Meanwhile, USA Compression’s average quarterly horsepower utilization rate was 94.6%, up from 93.6% a year ago.

USAC’s DCF, Cost, Capex & Balance Sheet

USAC’s distributable cash flow available to limited partners totaled $86.6 million (providing 1.4X distribution coverage), up 20.9% from the year-ago level.

Notably, on Oct. 10, USAC declared cash distribution of 52.5 cents per unit ($2.10 on an annualized basis) in the third quarter. The distribution was paid on Nov. 1, 2024, to its common unitholders of record as of Oct. 21.

The company reported $164.3 million in costs and expenses, up 5.2% from the year-ago quarter’s $156.1 million. It spent $34.1 million on growth capex. Maintenance capex amounted to $9.1 million.

As of Sept. 30, 2024, USA Compression had a net long-term debt of $2.5 billion.

USAC’s Guidance

USA Compression expects net income to fall between $105 million and $125 million, adjusted EBITDA in the range of $565-$585 million and distributable cash flow to be between $345 million and $365 million for 2024.

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

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Important Energy Earnings So Far

Right in the middle of 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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