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MPLX Beats Q1 Earnings Estimates on Pipeline Throughput

Zacks Equity Research
·3 min read

MPLX LP MPLX reported first-quarter adjusted earnings of 61 cents per unit, beating the Zacks Consensus Estimate of 56 cents. The bottom line was on par with the year-ago quarter figure.

Revenues of $992 million declined from first-quarter 2019 sales of $2,235 million. Also, the top line missed the Zacks Consensus Estimate of $2,249 million.

The better-than-expected earnings was backed by higher pipeline and gathering throughput. This was, however, partially offset by lower natural gas processed volumes from Rockies operations.

MPLX LP Price, Consensus and EPS Surprise

 

MPLX LP Price, Consensus and EPS Surprise
MPLX LP Price, Consensus and EPS Surprise

MPLX LP price-consensus-eps-surprise-chart | MPLX LP Quote

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Segmental Highlights

MPLX’s operating income from the Logistics and Storage segment increased from $687 million a year ago to $723 million. The year-over-year upside is attributable to higher average tariff rates from product pipelines and increased pipeline throughput.

Operating loss from the Gathering and Processing segment was recorded at $3,209 million against $225 million profit in the prior-year quarter. The underperformance can be attributed to a decline in processed volumes of natural gas from Rockies operations. The negative was partially offset by the surge in natural gas gathering throughput from Marcellus and Bakken operations.

Costs and Expenses

Total costs and expenses in the quarter were recorded at $3,478 million, significantly up from the year-ago level of $1,323 million. Although total costs rose, expenses related to operations declined to $538 million from $570 million.

Cash Flow

Distributable cash flow available to limited partners in first-quarter 2020 was $1,078 million, providing 1.44X distribution coverage, up from $757 million in the year-ago quarter. Distribution per unit was 68.75 cents in the reported quarter, representing an increase of 4.6% from the year-ago quarter.

Net cash flow from operating activities in the quarter under review increased to $1,009 million from $853 million recorded in the corresponding period of 2019.

Balance Sheet

As of Mar 31, 2020, the partnership’s cash and cash equivalents were $57 million. Its total long-term debt amounted to $20.5 billion, while debt-to-capitalization ratio was 0.61.

Outlook

The partnership lowered its 2020 capital budget by more than $700 million to $1 billion. Notably, the capital budget for growth projects in 2020 was slashed by more than $600 million to roughly $900 million. The partnership has decided to reduce operating expenses in the year by roughly $200 million.

Zacks Rank & Stocks to Consider

The partnershipcurrently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked stocks in the energy sector are Murphy USA Inc MUSA, Key Energy Services, Inc. KEGX and CNX Resources Corporation CNX. While Key Energy and Murphy sport a Zacks Rank #1 (Strong Buy), CNX Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA is likely to see earnings growth of 7% in the next five years.

Key Energy is likely to see bottom-line growth of 97.2% in 2020.

CNX Resources has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.

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CNX Resources Corporation. (CNX) : Free Stock Analysis Report
 
MPLX LP (MPLX) : Free Stock Analysis Report
 
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
 
Key Energy Services, Inc. (KEGX) : Free Stock Analysis Report
 
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Zacks Investment Research