Energy Transfer hikes full-year profit forecast after strong Q2 volumes

Energy Transfer (NYSE:ET) +1.8% post-market Thursday after reporting roughly in-line Q2 earnings but raising its full-year profit guidance, helped by strong crude and natural gas liquids transportation volumes.

Q2 net income attributable to partners rose to $1.31B, or $0.35/unit, from $911M, or $0.25/share, in the year-earlier quarter, and adjusted EBITDA increased to $3.76B from $3.12B a year ago; distributable cash flow jumped to $2.04B from $1.55B in the same period last year.

Energy Transfer (ET) said volumes continued to increase with the addition of new organic growth projects and acquisitions, resulting in record high crude oil transportation volumes of ~6.5M bbl/day, up 22.6% Y/Y, while natural gas liquids volumes rose 4% to ~2.2M bbl/day, also a quarterly record.

The company said it now sees full-year adjusted EBITDA coming in at $15.3B-$15.5B, including the impact of the recently closed WTG Midstream acquisition, up from a previous forecast of $15B-$15.3B; it also raised its FY 2024 growth capital spending estimate by ~$200M to ~$3.1B, citing the recent acquisition and new projects.

Seeking Alpha analyst Long Player says: “Energy Transfer showed a big jump in distributable cash flow to $2B from $1.5B as earnings per share hopped up to $0.35 from $0.25. The new distribution rate announced a few days ago is well supported by the distributable cash flow improvement. Deleveraging efforts have led to roughly half the preferred stock being redeemed and retired. Finances improved with a debt rating improvement. The partnership continues the efforts to improve the situation for common unitholders.”