Energy Transfer to Report Q2 Earnings: What's in Store for the Stock?

Core Viewpoint - Energy Transfer LP (ET) is anticipated to show a revenue increase while experiencing a decline in earnings per share for the second quarter of 2025, with revenues expected to reach $25.26 billion, reflecting a 21.87% year-over-year growth, and earnings per unit projected at 32 cents, indicating an 8.57% decline from the previous year [1][3][7]. Revenue Estimates - The Zacks Consensus Estimate for ET's second-quarter revenues is $25.26 billion, which is a 21.87% increase from the $20.73 billion reported in the same quarter last year [2][7]. - For the next quarter, revenues are estimated at $25.82 billion, with a year-over-year growth of 24.32% [2]. - The total revenue estimates for the current year and next year are $99.66 billion and $109.26 billion, respectively, showing a year-over-year growth of 20.55% and 9.63% [2]. Earnings Estimates - The consensus estimate for earnings per unit is 32 cents, which represents an 8.57% decline from the 35 cents reported in the same quarter last year [3][4]. - For the next quarter, earnings are estimated at 34 cents, with a projected growth of 6.25% year-over-year [4]. - The earnings estimates for the current year and next year are $1.41 and $1.56, respectively, indicating a growth of 10.16% and 10.76% [4]. Performance Insights - Energy Transfer has missed the Zacks Consensus Estimate for earnings in two of the last four quarters, resulting in an average negative surprise of 3.28% [5][6]. - The company's fee-based contracts and natural gas liquids (NGL) exports are expected to have significantly supported its second-quarter performance [7][13]. Strategic Developments - Energy Transfer is expanding its clean power generation portfolio, having brought online the first of eight planned 10-megawatt natural gas-fired power plants, which is expected to positively impact earnings [14]. - The company is leveraging its extensive pipeline infrastructure, benefiting from increased hydrocarbon output, with strong NGL export volumes contributing to its performance [15][16]. Market Position - Energy Transfer's units are trading at a trailing 12-month EV/EBITDA of 10.22X, which is lower than the industry average of 11.46X, indicating a relatively inexpensive valuation [17]. - The stock has gained 14.3% over the past year, outperforming the Zacks Oil and Gas Production Pipeline – MLB industry, which saw a 10.9% increase [19]. Long-term Outlook - The company operates a vast network of nearly 140,000 miles of pipelines across 44 states, positioning it well to capitalize on the increasing U.S. production of oil, natural gas, and NGLs [21]. - Ongoing investments to expand pipeline and processing capacity are expected to strengthen Energy Transfer's position in the midstream sector, supported by strong LNG export capabilities and rising domestic demand [22].