Enterprise Products Profit Down on NGL Margins; Expands $5 Billion Buyback
Enterprise Products Partners posted lower third-quarter earnings as weaker natural gas liquids margins offset record pipeline throughput. The company raised its unit buyback authorization to $5 billion and expects 2025 capital spending near the top of its guidance.
(Reuters) — Enterprise Products Partners reported lower-than-expected quarterly core profit on Oct. 29, as weaker results from its natural gas and liquids businesses offset strength in petrochemicals and refined products.
Enterprise also said its board increased the authorized size of its common unit buyback program to $5 billion from $2 billion, leaving $3.6 billion in remaining capacity.
The company described the authorization as a "multi-year" program that provides an additional way to return capital to investors.
The company repurchased $80 million worth of units during the quarter.
UBS analyst Manav Gupta called the buyback update "a positive", but "the magnitude of the miss could keep the stock under some pressure".
Shares of Enterprise were down 1.6% at $30.62 in premarket trading.
Enterprise moved record volumes through its network, with natural gas pipeline throughput up 8% at 21.0 trillion British thermal units (Btus) per day and equivalent pipeline volumes up 7% at 13.9 million barrels per day.
Those gains were offset by lower sales margins, reduced LPG loading fees after contract renewals and downtime at several natural gas liquids fractionators and the PDH 2 unit.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $2.41 billion in the third quarter, missing analysts' estimates of about $2.50 billion according to LSEG data.
The company invested $2 billion in the quarter, including $1.2 billion for growth projects, $583 million for Occidental Petroleum's gas gathering systems and $198 million in sustaining capex.
It now expects 2025 growth spending at the high end of its $4 billion–$4.5 billion range.
RBC Capital Markets analyst Elvira Scotto said challenges in the NGL Pipelines segment largely drove the miss but added that Enterprise's "steady cash flow and strong balance sheet can handle the planned capex spend".