MPLX LP (MPLX) Down 3.2% Since Last Earnings Report: Can It Recover?

A month has passed since MPLX LP (MPLX) last reported earnings. Shares have lost about 3.2% in that time, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is MPLX LP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the company’s most recent earnings report in order to better understand the important catalysts.

MPLX earnings and revenue lag in Q1 amid lower throughput volumes

MPLX reported first-quarter earnings of 98 cents per unit, missing the Zacks Consensus Estimate of 99 cents. However, the financial result increased compared to the previous year, when it amounted to 91 cents.

Total quarterly revenues of $2.85 billion missed the Zacks Consensus Estimate of $2.93 million. However, profit was up from the previous quarter’s $2.71 billion.

The poor performance can be attributed to reduced overall pipeline capacity and higher operating costs.

Segment highlights

MPLX Adjusted EBITDA z Logistics and Warehousing segment grew to $1.1 billion from $1.03 billion a year ago. The segment was helped by higher interest rates and growth from equity affiliates. However, total pipeline capacity in the first quarter was 5.3 million barrels per day, down 6% from year-ago levels.

Adjusted EBITDA from Collection and processing segment was $537 million, up from $493 million in the prior-year quarter. The segment benefited from higher processing volumes. The segment was also helped by a non-cash gain of $20 million related to the acquisition of the remaining interest in the Utica joint venture.

Total throughput volume averaged 6.2 billion cubic feet per day (Bcf/d), a marginal decline of 2% from prior-year levels. Natural gas processing volume of 9.4 Bcf/d represents an increase of 9% compared to the level of the prior-year quarter.

Costs and expenses

MPLX’s total costs and expenses were $1.6 billion, compared to prior-year quarter actuals of $1.5 billion. The increase is due to higher operating costs (including costs of purchased products).

Cash flow

Distributable cash flow for the quarter was $1.37 billion, providing 1.6x distribution coverage. This number increased from $1.27 billion in the same quarter last year.

Adjusted free cash flow decreased to $294 million from $1 billion in the same period in 2023.

Balance

As of March 31, 2024, the company’s cash and cash equivalents were $385 million. Its total debt was $20.44 billion.

The story continues

Perspectives

MPLX expects capital expenditures to be $1.1 billion in 2024, including $950 million in growth capital and $150 million in sustaining capital. The estimated figure shows an increase from the $838 million reported in 2023.

How have estimates changed since then?

Last month, investors saw a downward trend in new estimates.

VGM results

At this point, MPLX LP has a solid Growth Score of B, although it lags well behind its Momentum Score of F. However, the stock is rated a B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company generally show a downward trend, and the scale of these corrections looks promising. Notably, MPLX LP carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

MPLX LP is part of the Zacks Oil and Gas – Production and Pipelines industry. Over the past month, Kinder Morgan (KMI), a stock in the same industry, has gained 3.7%. More than a month ago, the company published its results for the quarter ended March 2024.

Kinder Morgan reported revenue of $3.84 billion in the most recent quarter, representing a -1.2% year-over-year change. EPS of $0.34 for the same period compared to $0.30 a year ago.

For the current quarter, Kinder Morgan is expected to report earnings per share of $0.26, representing a change of +8.3% from the prior-year quarter. The Zacks Consensus Estimate has changed +0.8% over the past 30 days.

Kinder Morgan carries a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM rating of B.

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