Pembina Pipeline PBA reported first-quarter 2023 earnings per share of 45 cents, missing the Zacks Consensus Estimate of 50 cents and also the year-earlier quarter's earnings of 64 cents. This underperformance was primarily due to the poor performance in the Marketing & New Ventures segment, which reported first-quarter adjusted EBITDA of C$169 million, down 36.9% from the year-ago quarter’s figures.
Quarterly revenues of $1.7 billion decreased by about 41.5% year over year and also missed the Zacks Consensus Estimate of $1.9 billion. Operating cash flow fell approximately 30.1% to C$458 million. Adjusted EBITDA of C$947 million was C$58 million lower than the figure registered in the first quarter of 2022.
In the first quarter of 2023, PBA saw volumes of 3,188 thousand barrels of oil equivalent per day (mboe/d) compared with the 3,369 mboe/d reported in the prior-year quarter.
Pembina declared a cash dividend for the second quarter of 66.75 Canadian cents per share to be paid, subject to applicable law, on Jun 30, 2023, to shareholders of record on Jun 15, 2023. The dividend represents an increase of 2%.
Pembina Pipeline Corp. Price, Consensus and EPS Surprise
Pembina Pipeline Corp. price-consensus-eps-surprise-chart | Pembina Pipeline Corp. Quote
Pipelines: Adjusted EBITDA of C$525 million increased by about 0.8% from the year-ago quarter’s level. This upside was due to higher revenues from Cochin Pipeline, Vantage Pipeline and AEGS. The year-over-year volume marginally fell about 1% to 2,467 mboe/d.
Facilities: Adjusted EBITDA of C$298 million improved from the year-ago quarter’s C$281 million. The upside was due to the stronger performance of certain gas processing assets, including the former Energy Transfer Canada plants and the Dawson Assets. Volumes of 721 mboe/d dipped about 17.7% year over year.
Marketing & New Ventures: Adjusted EBITDA of C$169 million decreased compared to C$268 million in the first quarter of 2022. The downside was attributable to a drop in commodity market prices, including NGL and crude oil, which contributed to a significant quarter-over-quarter decrease in the results of this segment.
Capital Expenditure & Balance Sheet
Pembina Pipeline spent C$137 million as capital expenditure during the quarter under review compared with C$179 million a year ago. As of Mar 31, 2023, PBA had cash and cash equivalents worth $100 million and $7 billion in the long-term debt. Debt to capitalization was 40.4%.
For the full-year 2023, Pembina Pipeline expects its adjusted EBITDA guidance in the C$3.5-C$3.8 billion range.
Pembina expects to maintain debt-to-adjusted EBITDA of 3.3 to 3.6 times by 2023.
Zacks Rank and Key Picks
Currently, Pembina Pipeline carries a Zacks Rank #3 (Hold). Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Archrock AROC and Ranger Energy Services RNGR, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is worth approximately $219.16 million. EPM currently pays investors $0.48 per share or 7.38% on an annual basis.
The company currently has a forward P/E ratio of 6.07. In comparison, its industry has an average forward P/E of 7.50, which means Evolution Petroleum is trading at a discount to the group.
Archrock is valued at around $1.55 billion. It delivered an average earnings surprise of 26.27% for the last four quarters. Its current dividend yield is 6.06%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.
Ranger Energy Services is valued at around $183.61 million. In the past year, its shares have risen 13.8%.
Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means RNGR is trading at a discount to the group.
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