Midstream Names Report Earnings Beat, Raise Guidance

Midstream second-quarter earnings are well underway with some notable developments for investors.

Magellan Midstream Partners (MMP), Cheniere Energy (LNG), and Williams (WMB) this week reported second-quarter earnings that beat Wall Street expectations, with two of the names raising full-year guidance.

Magellan reported adjusted EBITDA of $385.9 million, beating Bloomberg consensus estimates by 8.6%. The Bloomberg consensus was $354 million.

Based on the partnership’s second-quarter results, Magellan raised its full-year financial expectations. The increase reflects higher-than-expected performance last quarter and the improved outlook for commodity-related activities during the second half.

Magellan’s annual stand-alone DCF expectations for 2023 increased by $40 million to $1.26 billion, the firm said in a statement.

Additionally, Magellan estimated net income per unit to be $5.05 for 2023, with expected third-quarter net income of $1.15 per unit, according to the statement.

Magellan expected the merger with midstream corporation ONEOK to close by the end of the year. The cash-and-stock deal valued at $18.8 billion was first announced in May.

On Thursday, August 17, VettaFi will host a conversation with Magellan’s president and CEO Aaron Milford centered on the pending merger with ONEOK. Click here to register.  

See more: “Better Together: Energy Consolidation Continues

Cheniere beat consensus by 13.6%, reporting adjusted EBITDA of $1.858 billion compared to the Bloomberg consensus estimate of $1.622 billion.

Cheniere also raised its full-year 2023 consolidated adjusted EBITDA guidance from $8.3 billion to $8.8 billion.

Williams also beat Bloomberg consensus estimates on second-quarter adjusted EBITDA. The company reported $1.611 billion compared to the $1.57 billion expectation, coming in at 2.6% above Bloomberg consensus.

Williams reaffirmed its previous full-year adjusted EBITDA guidance of $6.4 billion to $6.8 billion and attributed the second-quarter increase in adjusted EBITDA to strong earnings growth across its base business. The firm benefited from record gathering volumes and the first full-quarter contributions from the MountainWest Pipeline transmission and storage assets, Williams said in a statement.

Additionally, Cheniere and Williams provided updates on equity repurchases. Cheniere spent $337 million on buybacks during the second quarter, while Williams repurchased $56 million in equity.

Investors can get exposure to Magellan, Cheniere, and Williams with the Alerian Energy Infrastructure ETF (ENFR). ENFR tracks the Alerian Midstream Energy Select Index (AMEI), a composite of North American energy infrastructure companies. Investors can also access AMEI with the ALPS Alerian Energy Infrastructure Portfolio (ALEFX), which provides exposure in a VIT wrapper.

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For more news, information, and analysis, visit the Energy Infrastructure Channel.