Yahoo Finance Why Is USA Compression (USAC) Down 4.4% Since Last Earnings Report?
It has been about a month since the last earnings report for USA Compression Partners (USAC). Shares have lost about 4.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is USA Compression due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
USA Compression Posts Q1 Loss Wider Than Expected
USA Compression Partners, LP reported first-quarter 2023 net loss per common unit of a penny, compared to the Zacks Consensus Estimate of a profit of a penny. The unfavorable comparison was due to an increase in costs and expenses.
However, USAC’s bottom line improved from the year-earlier quarter’s loss of 9 cents on the back of higher-than-expected revenue-generating horsepower capacity, which, at 3,241,296 horsepower, came ahead of the Zacks Consensus Estimate of 3,096,000 horsepower.
Revenues of $197.1 million were 20.6% above the year-ago quarter and beat the Zacks Consensus Estimate of $189 million.
Adjusted EBITDA was up 20.1% to $118.2 million. Moreover, the partnership’s distributable cash flow rose from $50.1 million in the prior-year quarter to $62.6 million.
The partnership reported operating cash flow of $42.3 million in the quarter. This marked an increase from $35.1 million generated in the prior-year quarter. However, gross operating margin, at 66.2%, marked a slight drop from the year-ago period’s 67.1%.
In the first quarter, the partnership’s revenue-generating horsepower capacity increased 8.8% from last year’s corresponding period to 3,241,296 horsepower. Further, the average monthly revenue per horsepower rose to $18.19 from $16.87 in the first quarter of 2022. Meanwhile, USA Compression Partners’ average quarterly horsepower utilization rate came in at 92.6%, up from 84.9% in the year-ago period.
DCF, Cost, Capex & Balance Sheet
USA Compression Partners reported that its DCF available to limited partners for the first quarter totaled $62.6 million (providing 1.21X distribution coverage), up 25% from the year-ago level. Notably, on Apr 13, the partnership announced first-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis).
USAC reported total costs and expenses of $146.1 million in first-quarter 2023, rising 13.8% from the year-ago quarter.
USA Compression Partners spent $51.2 million on growth capex. The partnership’s maintenance capex consisted of $5 million.
As of Mar 31, 2023, the partnership had $2.2 billion in net long-term debt.
Guidance
For 2023, USA Compression Partners projects full-year DCF between $260 million and $280 million. Meanwhile, it expects adjusted EBITDA of $490-$510 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, USA Compression has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
USA Compression has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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USA Compression Partners, LP (USAC) : Free Stock Analysis Report
