USA Compression Partners (USAC) Reports In-Line Q2 EPS

USA Compression Partners (NYSE: USAC) reported Q2 EPS of ($0.10), in-line with the analyst estimate of ($0.10). Revenue for the quarter came in at $156.6 million versus the consensus estimate of $160.41 million.

“The second quarter of 2021 continued the pattern of stability in USA Compression’s business that we began to experience as we came into the year,” commented Eric D. Long, USA Compression’s President and Chief Executive Officer. “As the continued strength in commodity prices throughout the quarter helped further improve prospects for many across the broader energy industry, we have seen our customers maintain capital discipline and continue with their scaled-down budgets for 2021. While storage of crude oil and natural gas worldwide continues to be reduced, there is some potential short-term pressure on demand due to the COVID-19 Delta variant. As global economies open back up and continue to strengthen, we believe the stage is being set for improved E&P activity. We are seeing improving fundamentals for compression services – increased levels of quotes, contract execution and pricing – which should translate into an improved outlook for compression services in the latter half of 2021 and on into 2022. The post-election uncertainty of prospective regulatory and legislative actions regarding energy transition, has also tempered activity this year and may have further impact into the future.”

“More broadly, we believe the prospects for natural gas continue to be positive. While we’ve seen modestly increasing rig counts since the lows last summer, when combined with a meaningful acceleration in the rate of completing previously drilled but uncompleted wells, domestic natural gas production has increased more than 5% above this time last year. Exports of LNG have continued at or near historic highs. And with the continued strength in natural gas prices, we expect these trends to continue.”

“As we have throughout the recent cycle, we continue to focus on managing our capital spending and controlling expenses throughout the company. Our operating margins remain attractive and consistent with historical performance. These efforts helped in part to achieve coverage and leverage metrics better than our expectations for the quarter.”

GUIDANCE:

USA Compression is confirming its full-year 2021 guidance as follows:

• Net income range of $0.0 million to $20.0 million;
• A forward-looking estimate of net cash provided by operating activities is not provided because the items necessary to estimate net cash provided by operating activities, in particular the change in operating assets and liabilities, are not accessible or estimable at this time. The Partnership does not anticipate the changes in operating assets and liabilities to be material, but changes in accounts receivable, accounts payable, accrued liabilities and deferred revenue could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected Adjusted EBITDA and Distributable Cash Flow;
• Adjusted EBITDA range of $385.0 million to $405.0 million; and
• Distributable Cash Flow range of $193.0 million to $213.0 million

For earnings history and earnings-related data on USA Compression Partners (USAC) click here.

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