Enbridge Inc. ENB reported third-quarter 2024 adjusted earnings per share (EPS) of 40 cents, in line with the Zacks Consensus Estimate. The bottom line, however, declined from the year-ago quarter’s level of 46 cents.

Total quarterly revenues of $10.9 billion increased from $7.3 billion recorded in the prior-year quarter. The top line also beat the Zacks Consensus Estimate of $4.5 billion.

The in-line quarterly earnings can be attributed to higher Adjusted EBITDA contributions from its major business segments like Liquids Pipelines, Gas Transmission and Gas Distribution and Storage, partially offset by higher financing costs associated with the acquisition of Enbridge Gas Ohio and Enbridge Gas Utah.

Segmental Analysis

Enbridge conducts business through five segments — Liquids Pipelines, Gas Transmission, Gas Distribution and Storage, Renewable Power Generation, and Eliminations and Other.

Liquids Pipelines: The segment’s adjusted earnings before interest, income taxes, and depreciation and amortization (EBITDA) totaled C$2.34 billion, up from C$2.3 billion in the year-earlier quarter. Higher contributions from the Mainline System and Other Systems (including the Southern Lights Pipeline and Express-Platte System) aided the segment, partially offset by lower contributions from the Regional Oil Sands system and Gulf Coast and Mid-Continent systems.

Gas Transmission: Adjusted earnings in this segment totaled C$1.15 billion, up from C$1.09 billion recorded in the third quarter of 2023. Higher contributions from the U.S. gas transmission segment and lower total operating costs associated with the same primarily aided the segment’s performance. Lower contributions from the Canadian Gas Transmission segment partially offset the positives.

Gas Distribution and Storage: The unit generated a profit of C$522 million, up from C$271 million in the prior-year quarter. The rise was mainly due to increased contributions from the U.S. Gas Utilities and Enbridge Gas Ontario.

Renewable Power Generation: The segment recorded earnings of C$86 million, down from C$119 million in the prior-year quarter.

Eliminations and Other: The segment earned a profit of C$96 million, up from C$90 million in the third quarter of 2023.

Distributable Cash Flow (DCF)

Enbridge reported a DCF of C$2.6 billion, up from C$2.57 billion recorded a year ago.

Balance Sheet

At the end of the third quarter, ENB reported long-term debt of C$87.3 billion. It had cash and cash equivalents of C$1.88 billion. The current portion of long-term debt was C$7.1 billion.

Outlook

For 2024, the company restated its guidance for adjusted EBITDA (on base business) and DCF per share at $17.7-$18.3 billion and $5.40-$5.80, respectively.

The pipeline company also reaffirmed its short-term growth outlook (2023 to 2026) of 7-9% for adjusted EBITDA and 3% for DCF per share.

ENB’s Zacks Rank and Key Picks

Currently, ENB carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC, The Williams Companies, Inc. WMB and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy), while The Williams Companies and FuelCell Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

The Williams Companies, Inc. is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

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