Antero Midstream Corporation (AM) surprised analysts with its fourth-quarter 2023 earnings, exceeding both profit and revenue expectations. The company reported adjusted earnings per share of 24 cents, beating the Zacks Consensus Estimate of 21 cents, and also showcasing an enhancement from the previous year’s 20 cents.
Compression Volume Surge Drives Strong Performance
Total quarterly revenues of $260 million exceeded the Zacks Consensus Estimate of $249 million, marking an increase from the year-ago quarter’s $242 million. The exceptional performance was largely attributed to an upsurge in compression and increased low pressure gathering volumes.
Operational Excellence
In the fourth quarter, Antero Midstream saw a substantial increase in average daily compression volumes, totaling 3,343 million cubic feet (MMcf/d) compared with 2,945 MMcf/d in the year-ago period. The company’s high-pressure gathering volumes and low-pressure gathering volumes also experienced significant growth, contributing to its robust operational performance.
Financial Overview
The company’s direct operating expenses and total operating expenses saw a rise compared to the corresponding period of 2022. As of December 31, Antero Midstream held cash and cash equivalents of $66,000 and long-term debt of $3,213.2 million.
Outlook and Zacks Rank
For 2024, Antero Midstream expects adjusted EBITDA to be in the range of $1,020-$1,060 million, indicating a 5% increase from the 2023 level at the midpoint. The company also anticipates Free Cash Flows after dividends to be in the range of $235-$275 million for 2024. Currently, AM holds a Zacks Rank #3 (Hold).
Better-Ranked Stocks in Energy Sector
Investors seeking opportunities in the energy sector may consider better-ranked stocks such as Oceaneering International (OII), Energy Transfer LP (ET), and Harbour Energy (HBRIY). Oceaneering International and Energy Transfer currently sport a Zacks Rank of #1 (Strong Buy), while Harbour Energy holds a Zacks Rank of #2 (Buy).
Oceaneering International, a market-leading supplier of offshore equipment and technology solutions to the energy industry, projects an increase in free cash flows for 2024. Meanwhile, Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States, with a positive outlook.
Harbour Energy, primarily involved in upstream operations, recently announced the acquisition of Wintershall Dea asset portfolio, expected to boost its estimated production. The company has also made significant progress in reducing its debt over the past year.
With a strong financial performance in Q4 and a positive outlook, Antero Midstream has positioned itself as a noteworthy player in the energy industry, offering promising opportunities for investors.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
