Magellan Midstream Partners LP (NYSE:MMP) reported Q1 2023 revenues of $675 million, missing the consensus of $723.5 million.
- Net income rose to $274 million in Q1, from $166 million a year ago, led by higher profits from its commodity-related activities and improved core fee-based transportation and terminals activities performance.
- Adjusted EBITDA rose to $382 million from $337 million a year ago.
- EPS of $0.78 came below the consensus of $1.19.
- The operating margin for refined products increased to $337 million (from $235 million in the prior year), and crude oil rose to $448 million (from $341 million a year ago).
- Distributable cash flow stood at $313 million in the quarter, vs $265 million a year ago. FCF increased to $281 million from $240 million in the prior year quarter.
- Expansion capital spending increased to $32 million from $26 million in the prior year quarter.
- In Q1 2023, Magellan repurchased shares worth $64 million, resulting in total repurchases of around $1.34 billion since 2020 under the $1.5 billion share repurchase program.
- Outlook: MMP increased the 2023 EPS outlook to $4.95 (vs consensus of $4.84) from $4.80 earlier.
- The company also raised DCF guidance by $40 million to $1.22 billion, net income to $1.00 billion (from $975 million), adjusted EBITDA to $1.53 billion (from $1.49 billion earlier) and FCF to $1.10 billion (from $1.07 billion earlier).
- MMP expects expansion capital spending to be around $120 million in 2023 (vs $110 million earlier) and $40 million in 2024.
- The company expects EPS of $1.10 in Q2 2023 vs consensus of $1.13.
- “Magellan began 2023 with strong financial results that exceeded our initial expectations, resulting from an improved pricing environment that benefited our commodity-related activities and continued solid demand for our transportation and terminals services. Our overall financial forecast for the full year has also strengthened, supported by our healthy first-quarter results as well as our updated outlook on mid-year tariff adjustments for our refined products pipeline system.” said CEO Aaron Milford.
Price Action: MMP shares are trading higher by 0.63% at $55.19 at last check Thursday.
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