Energy Transfer LP (ET, Financial) released its 8-K filing on November 6, 2024, reporting financial results for the third quarter ended September 30, 2024. The company, which owns one of the largest portfolios of crude oil, natural gas, and natural gas liquid assets in the US, primarily in Texas and the US midcontinent region, reported a net income attributable to partners of $1.18 billion, translating to a net income per common unit of $0.33. This fell short of the analyst estimate of $0.37 per share. However, the company fell short of revenue expectations, reporting $20.77 billion against the estimated $22.30 billion.
Performance and Challenges
Energy Transfer LP's performance in Q3 2024 was marked by significant operational achievements, including record-setting volumes in crude oil transportation and exports, as well as midstream gathered and produced volumes. Despite these operational successes, the company's earnings per share fell short of analyst expectations, which could be attributed to increased operating expenses and interest expenses. The company's ability to manage these costs effectively will be crucial in maintaining profitability.
Financial Achievements and Industry Impact
The company reported an Adjusted EBITDA of $3.96 billion, up from $3.54 billion in the same period last year, highlighting its robust operational performance. Distributable Cash Flow attributable to partners was $1.99 billion, a slight increase from the previous year. These metrics are vital for Energy Transfer LP as they reflect the company's ability to generate cash flow to support its distributions and capital expenditures, which are critical in the capital-intensive oil and gas industry.
Income Statement and Balance Sheet Insights
Energy Transfer LP's revenue for the quarter was $20.77 billion, slightly above the previous year's $20.74 billion. The company's operating income was $2.18 billion, with total costs and expenses amounting to $18.59 billion. On the balance sheet, total assets increased to $124.43 billion from $113.70 billion at the end of 2023, driven by growth capital expenditures and strategic acquisitions.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income Attributable to Partners | $1.18 billion | $584 million |
| Adjusted EBITDA | $3.96 billion | $3.54 billion |
| Distributable Cash Flow | $1.99 billion | $1.98 billion |
Strategic and Operational Highlights
Energy Transfer LP completed the acquisition of WTG Midstream Holdings LLC, adding approximately 6,000 miles of gas gathering pipelines and nine gas processing plants. The company also formed a joint venture with Sunoco LP, enhancing its crude oil and produced water gathering capabilities in the Permian Basin. These strategic moves are expected to bolster Energy Transfer's operational footprint and revenue streams.
Energy Transfer benefits from a portfolio of assets with exceptional product and geographic diversity. The Partnership’s multiple segments generate high-quality, balanced earnings with no single segment contributing more than one-third of the Partnership’s consolidated Adjusted EBITDA for the three months ended September 30, 2024.
Analysis and Outlook
Energy Transfer LP's Q3 2024 results demonstrate its strong operational capabilities and strategic growth initiatives. However, the shortfall in earnings per share highlights the challenges of managing rising costs and interest expenses. As the company continues to expand its asset base and enhance its operational efficiency, maintaining a balance between growth and cost management will be essential for sustaining its financial performance and shareholder value.
Explore the complete 8-K earnings release (here) from Energy Transfer LP for further details.
