Yahoo Finance Pembina (PBA) Q1 Earnings Rise Y/Y, Sales Lag Estimates
Pembina Pipeline Corporation PBA reported first-quarter 2024 earnings per share of 73 Canadian cents, up from the prior-year quarter's level of 61 Canadian cents. This improvement can be attributed primarily to higher contributions from all segments of the company.
Revenues of $1.1 billion decreased 32.8% year over year and missed the Zacks Consensus Estimate by $1.8 billion.
Operating cash flow decreased approximately 4.8% to C$436 million. Adjusted EBITDA came in at C$1,044 million compared with C$947 million in the year-ago period. This is due to higher net revenues and volumes on some of Pembina's Pipelines and Facilities’ assets.
In the first quarter, PBA witnessed volumes of 3,698 thousand barrels of oil equivalent per day (mboe/d) compared with 3,455 mboe/d in the prior-year quarter.
On Apr 1, the company declared the successful conclusion of the Alliance/Aux Sable acquisition aimed at bolstering its business. This acquisition aligns seamlessly with Pembina's strategic objectives, fostering the expansion and fortification of its current franchise while offering increased involvement in robust end-use markets and lighter hydrocarbons.
Pembina's board of directors declared a common share cash dividend of 69 Canadian cents per share, representing an increase of 3.4%, for the second quarter of 2024, to be paid, subject to applicable law, on Jun 28, to its shareholders of record as of Jun 15.
On May 13, Pembina Pipeline Corporation announced the renewal of its share buyback program, which has been approved by the Toronto Stock Exchange. The program permits PBA to repurchase up to 5% of its common shares, starting May 16, 2024, and ending May 15, 2025. This allows a maximum repurchase of approximately 28.98 million shares out of the 579.53 million outstanding as of May 8, 2024.
Pembina Pipeline Corp. Price, Consensus and EPS Surprise
Pembina Pipeline Corp. price-consensus-eps-surprise-chart | Pembina Pipeline Corp. Quote
Segmental Information
Pipelines: Adjusted EBITDA of C$599 million increased about 14.1% from the year-ago quarter’s level. This upside was attributed to increased revenues and volumes on the Peace Pipeline system, the reactivation of the Nipisi Pipeline, and a greater contribution from the Alliance Pipeline due to higher tolls on seasonal contracts. However, the figure missed our projection of C$639.8 million.
Volume increased about 5.3% year over year to 2,598 mboe/d.
Facilities: Adjusted EBITDA of C$310 million increased from the year-ago quarter’s figure of C$298 million. The rise was mainly fueled by increased volumes at the Redwater Complex and Younger compared to the prior-year quarter. The figure also beat our estimate of C$284.8 million.
Volumes of 805 mboe/d increased about 11.7% year over year.
Marketing & New Ventures: Adjusted EBITDA of C$188 million increased from C$169 million in the prior-year quarter. The upside can be attributed to higher contribution from Aux Sable due to wider frac spreads and a new third-party marketing arrangement. The figure also beat our projection of C$124.4 million.
Volumes of 295 mboe/d increased about 10.5% year over year.
Capital Expenditure & Balance Sheet
Pembina’s capital expenditure was C$186 million in the first quarter compared with C$137 million a year ago.
As of Mar 31, 2024, PBA had cash and cash equivalents worth C$1.7 billion and long-term debt of C$18.1 billion. Its debt to capitalization was 53.2%.
Pembina's Strategic Developments and Industry Impact
During the first quarter, Pembina entered into long-term agreements with Dow Chemical Canada to supply and transport up to 50,000 barrels per day of ethane. This will support the newly announced construction of an integrated ethylene cracker and derivatives facility in Fort Saskatchewan, known as the Path2Zero Project. This project would give a significant boost to the current ethane market in Alberta. With Pembina's leading ethane supply and transportation business, and its extensive and integrated value chain, the company is positioned to benefit from this new development.
The oil and gas storage and transportation company recently made notable progress on the proposed Cedar LNG project. Key developments include securing long-term commercial agreements and issuing a notice to proceed to the engineering, procurement and construction contractors. Following these milestones, Cedar LNG and Pembina's partner, the Haisla Nation, have begun their financing processes in preparation for a final investment decision, anticipated by June 2024.
In addition to the LNG projects on Canada's West Coast and the growth of Alberta's petrochemical industry, the Western Canada energy market is preparing for the completion of the Trans Mountain pipeline expansion. This expansion will provide new transportation capacity for Canadian oil producers and is expected to increase condensate demand. These significant developments are anticipated to drive increased volumes across the Western Canadian Sedimentary Basin.
Guidance
For full-year 2024, the Zacks Rank #3 (Hold) company expects adjusted EBITDA in the C$4.05-C$4.30 billion range. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company also expects to benefit from the Dow Chemical agreement to supply and transport ethane for the construction of a new integrated ethylene cracker derivatives facility at Fort Saskatchewan.
Important Q1 Energy Earnings So Far
While we have discussed Pembina Pipeline’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
Independent oil and natural gas company Magnolia Oil & Gas Corporation MGY announced adjusted net income of 49 cents per share, which beat the Zacks Consensus Estimate of 44 cents. However, the bottom line deteriorated from the year-ago quarter’s level of 56 cents.
Total revenues came in at $319.4 million, which beat the Zacks Consensus Estimate of $308 million. The top line also improved 3.6% from $308.4 million recorded in the year-ago period. As of Mar 31, 2024, the company had cash and cash equivalents worth $399.3 million and long-term debt of $393.5 million, with debt to total capital of about 17.2%.
SLB SLB, the largest oilfield contractor, delivered earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy VLO reported adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, exceeded our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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