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EQM Reports Strong Earnings and Distribution Growth in Q3

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Nov. 20 2020, Updated 4:51 p.m. ET

EQM reports strong EBITDA growth

EQM Midstream Partners (EQM) announced its third-quarter results today. It reported adjusted EBITDA of $280.1 million for the quarter ended September 30, an increase of 65% year-over-year. In Q2 2018, EQM Midstream Partners reported adjusted EBITDA of $209.5 million.

EQM Midstream Partners, the third largest natural gas gatherer in the country, announced a distribution of $1.115 per unit, an increase of 14% from its distribution in the same quarter last year and a 2% sequential increase. The record date for the distribution is November 2 and it will be paid on November 14.

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Earnings drivers

EQM’s operating revenues in the third quarter increased $158.3 million, a 77% rise from the comparable period last year. The higher revenues mainly resulted from the Rice Midstream Partners acquisition, which closed in July 2018.

EQM’s capital spending on expansion and contribution to Mountain Valley Pipeline totaled $489 million in Q3 and $1.0 billion year-to-date. Mountain Valley Pipeline is strategically located in the Marcellus Shale and is expected to be in-service in Q4 2019.

EQM expects its 2018 full-year adjusted EBITDA to be in the range of $990 million and $1,100 million. Its distributable cash flow is expected to be around $810 million and $830 million this year.

EQM Midstream Partners stock is one of the laggards this year. It has lost more than 35%, while EQT Corporation (EQT) has lost 30% so far in 2018. The Alerian MLP ETF (AMLP), which represents the top 25 MLPs, has fared better and is down 10% in the same period. EQM makes up 3.9% of AMLP.

Midstream giant Kinder Morgan reported its quarterly earnings last week. To learn more about its earnings, read Decoding Kinder Morgan’s Third-Quarter Earnings.

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