Antero Midstream's (AM) Q2 Earnings & Sales Lag Estimates

Antero Midstream Corporation (NYSE:AM) reported second-quarter 2019 adjusted earnings per share of 15 cents, up 19% from the year-ago level. However, the figure missed the Zacks Consensus Estimate of 22 cents.

Revenues in the quarter rose 5% year over year to $256 million. The top line, however, missed the Zacks Consensus Estimate of $281 million.

The weaker-than-expected results can be attributed to lower fresh water delivery volumes, partially offset by growth in gathering, compression and Clearwater treatment volumes.

Dividend

Adjusted distributable cash flow of $156.1 million, with coverage of 1.0x, was up from the prior-year quarter’s $142.7 million.

Second-quarter 2019 dividend of 30.75 cents per share has been approved by the board of directors. The dividend is likely to be paid on Aug 7 to its stockholders of record as of Jul 26.

Operational Performance

During second-quarter 2019, compression volumes were recorded at 218,020 million cubic feet (MMcf), up from the year-ago level of 141,819 MMcf. On a per-Mcf basis, compression fee was 19 cents, in line with the prior-year level.

In the second quarter, high pressure gathering volumes were 238,406 MMcf, up from the year-ago period’s 175,818 MMcf. On a per-Mcf basis, average gathering high pressure fee was 20 cents, higher than the prior-year level 19 cents.

Low pressure gathering volumes averaged 242,266 MMcf, up from the second-quarter 2018 figure of 180,268 MMcf. On a per-Mcf basis, average gathering low pressure fee was 33 cents, higher than the year-ago level of 32 cents.

Fresh water delivery volumes came in at 11,147 thousand barrels (MBbls), down from the prior-year level of 20,766 MBbls. On a per-barrel basis, average fresh water distribution fee was $3.90 in the second quarter, improving from the prior-year level of $3.78.

Operating Expenses

Total pro-forma operating expenses in the quarter were recorded at $138 million.

Balance Sheet

As of Jun 30, Antero Midstream had $7.8 million in cash and cash equivalents, and $2,526.3 million of long-term debt. As of the same date, it had a long-term debt-to-capitalization ratio of 38.9%.

Guidance

The company’s Sherwood 12 processing plant, having 200 MMcf/d of capacity, will likely come online in third-quarter 2019.

Zacks Rank and Stocks to Consider

Currently, Antero Midstream has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the energy sector are given below:

MPLX LP (NYSE:MPLX) provides midstream infrastructures to upstream companies. Its bottom line in 2019 is expected to improve 23.6% from a year ago. The company has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cheniere Energy, Inc. (NYSE:LNG) is an upstream energy company primarily engaged in liquefied natural gas-related businesses. Its bottom line in 2019 is expected to improve nearly 5% from a year ago. The company has a Zacks Rank #2.

Transportadora De Gas Sa Ord B (NYSE:TGS) is a midstream energy firm. In the trailing four quarters, the company delivered average positive earnings surprise of 114%. The company has a Zacks Rank #1.

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