Targa (TRGP) Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Financial Performance - Targa Resources Corp. reported second-quarter 2024 earnings of $1.33 per share, exceeding the Zacks Consensus Estimate of $1.21, but down from $1.44 in the same quarter last year due to higher product costs [1] - Revenues reached $3.6 billion, a 4.6% increase year over year, driven by higher sales of commodities and midstream service fees, although it fell short of the Zacks Consensus Estimate of $4.3 billion [2] - Adjusted EBITDA for the quarter was $984.3 million, up from $789.1 million in the prior-year period [2] Dividend and Share Repurchase - Targa declared a quarterly cash dividend of 75 cents per common share, totaling approximately $164 million to be distributed on August 15, 2024 [3] - The company repurchased over 2.9 million shares for approximately $355 million at an average price of $118.91 per share, with $291.3 million remaining in its existing $1 billion share repurchase program [4] Operational Highlights - Significant volumes were recorded in the Permian Basin, with the new Roadrunner II plant achieving high utilization [5] - The Gathering and Processing segment reported an operating margin of $572.6 million, up 14% year over year, reflecting a 12% increase in Permian Basin volumes [6] - The Logistics and Transportation segment's operating margin increased 34.2% year over year to $547.7 million, driven by higher pipeline transportation and fractionation margins [6][7] Cost and Capital Expenditure - Product costs for the second quarter were $2.2 billion, a 6% increase from the previous year, while operating expenses rose to $290.7 million [9] - Capital expenditures for growth programs were $798.7 million, compared to $579.5 million in the prior year [9] Future Guidance - For 2024, Targa anticipates adjusted EBITDA between $3.95 billion and $4.05 billion, a 5% increase from previous estimates, driven by increased operational activity [11] - Capital expenditures for 2024 are projected at $2.7 billion, including investments in new gas processing plants and expanded infrastructure [12] - Continued growth is expected in 2025, with higher adjusted EBITDA and free cash flow, leading to increased shareholder returns [13]