Pembina (PBA) Stock Rises 2% After Q2 Earnings Beat Estimates

Pembina Pipeline Corporation’s PBA stock has gone up 2% since the second-quarter 2022 earnings announcement on Aug 4.

The rise could be attributed to Pembina Pipeline’s second-quarter earnings beating the consensus mark and a year-over-year improvement in quarterly sales.

Inside Pembina Pipeline’s Earnings

Pembina Pipeline reported second-quarter 2022 earnings per share of 54 cents, beating the Zacks Consensus Estimate of 48 cents and also the year-earlier quarter's earnings of 32 cents. This outperformance was primarily due to the healthy performance of the Pipeline segment and year-over-year improvements in the earnings of two other segments, namely facilities and marketing & new ventures.

Quarterly Revenues of $2.42 billion improved about 52.4% year over year. This growth could be attributed to better year-over-year performances of the various segments of the company.

Operating cash flow rose approximately 3.4% to C$604 million. Adjusted EBITDA of C$849 million was C$71 million higher than the figure registered in the second quarter of 2021.

In the second quarter of 2022, PBA saw volumes of 3,344 thousand barrels of oil equivalent per day (mboe/d), comparing marginally unfavorably to the 3,500 mboe/d reported in the prior-year quarter.

Pembina Pipeline Corp. Price, Consensus and EPS Surprise

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$523 million was marginally up from the year-ago quarter’s level of C$522 million. This upside was due to higher volumes and higher tolls on certain pipeline systems, a higher share of profit from Alliance due to higher volumes resulting from a wider natural gas price differential in combination with the sale of the linepack inventory and higher recognition of deferred revenue volumes in the Vantage Pipeline. The year-over-year volume marginally fell about 0.4% to 2,476 mboe/d.

Facilities: Adjusted EBITDA of C$277 million improved from the year-ago quarter’s C$270 million. The upside could be attributed to a positive impact of a realized gain on commodity-related derivatives and higher contracted volumes at the Cutbank Complex. Volumes of 868 mboe/d dipped marginally by about 0.4% year over year.

Marketing & New Ventures: Adjusted EBITDA of C$103 million compared favorably with C$38 million in the second quarter of 2021. This upside was due to higher margins on crude oil and NGL sales combined with a higher contribution from Aux Sable due to a wider AECO-Chicago natural gas price differential. The Marketing & New Ventures segment recorded NGL volumes worth 176 mboe/d, consistent with the same period in the prior year.

Capital Expenditure & Balance Sheet

Pembina Pipeline spent C$152 million as capital expenditure during the quarter under review compared with C$146 million a year ago. As of Jun 30, 2022, PBA had cash and cash equivalents worth C$71 million and C$9.66 billion in long-term debt. Debt-to-capitalization was 39.6%.

Guidance

For full-year 2022, Pembina Pipeline raised its adjusted EBITDA guidance from the earlier C$3.55-C$3.6 billion range to the C$3.575-C$3.675 billion range.

The company stated that relative to its previous guidance, the revised outlook for 2022 primarily reflects stronger marketing results, higher contributions from the Alliance and Cochin pipelines as well as certain assets in the gas services business and the anticipated closing of the proposed transaction with KKR in August 2022.

Zacks Rank & Key Picks

Pembina Pipeline currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include NexTier Oilfield Solutions NEX, ExxonMobil XOM and Gulfport Energy GPOR, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NexTier’s 2022 earnings stands at $1.35 per share, up about 413.9% from the year-ago loss of 43 cents.

NEX beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 269.5%.

The Zacks Consensus Estimate for ExxonMobil’s 2022 earnings is pegged at $12.43 per share, up about 131% from the year-ago earnings of $5.38.

The Zacks Consensus Estimate for XOM’s 2022 earnings has been revised upward by about 21.1% over the past 60 days from $10.26 per share to $12.43 per share.

The Zacks Consensus Estimate for Gulfport Energy’s 2022 earnings has been revised about 9% upward over the past 60 days from $19.28 per share to $21.03.

Gulfport Energy is valued at around $1.74 billion. The Zacks Consensus Estimate for GPOR’s 2022 earnings is pegged at $21.03 per share.

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