Shares of Texas-based Shell Midstream Partners (SHLX) declined 2.3% in the early trading session on Monday after the company’s earnings and revenues for the third quarter of 2021 fell short of expectations.
The company owns, operates, develops and acquires pipelines and other midstream and logistics assets.
Shell Midstream reported earnings of $0.29 per share in the third quarter, lower than $0.36 per share reported in the second quarter of 2021 and the Street’s estimate of $0.33 per share.
Revenue declined to $128 million from $148 million in the previous quarter. The figure failed to meet analysts’ expectations of $134.75 million. Adjusted EBITDA totaled $145 million, down from $207 million in the prior quarter. (See Insiders’ Hot Stocks on TipRanks)
Cash available for distribution fell $64 million quarter-over-quarter to $122 million due to downtime at most of the company’s Gulf of Mexico and Gulf Coast assets as a result of Hurricane Ida.
The CEO of Shell Midstream Partners, Steven C. Ledbetter, said, “As we move forward, we believe our strong portfolio position will deliver stable, ratable cash flow, and we expect to generate excess cash.”
“Along with our refreshed financial framework and strong balance sheet, this will allow us to navigate the marketplace and selectively take advantage of growth opportunities that will be accretive to all unitholders,” Ledbetter added.
The company expects the hurricane’s impact to continue into the fourth quarter. It anticipates both net income and cash available for distribution to take a hit of $10 million to $15 million during the quarter.
Overall, the stock has a Moderate Sell consensus rating based on 1 Buy, 3 Holds and 3 Sells. The average Shell Midstream Partners price target of $13.36 implies 10.1% upside potential. Shares have gained nearly 49% over the past year.
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Midstream Partners, with 8.3% of investors on TipRanks increasing their exposure to the stock over the past 30 days.