SMC Earnings Prediction
The chart below shows how SMC performed 10 days before and after its earnings report, based on data from the past quarters. Typically, SMC sees a +4.53% change in stock price 10 days leading up to the earnings, and a -0.14% change 10 days following the report. On the earnings day itself, the stock moves by -3.80%. This data can give you a slight idea of what to expect for the next quarter's release.
SMC Key Earning Data
2024/Q4
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SMC Earnings Analysis
Summit Midstream Corp Corporation (SMC.N) Earnings Conference Call
Positive
Northeast Segment Divestiture Impact: Summit Midstream Corporation divested its Northeast segment for $700 million, reducing leverage from 5.4 times to 3.9 times and increasing unit price from around $17 to nearly $30.
Balance Sheet Refinancing Success: Successfully refinanced the balance sheet with an upsized credit facility and new second lien notes, increasing financial flexibility and reducing interest expense.
Corporate Structure Transition: Converted from a master limited partnership to a C-Corp, broadening the investor base and improving trading liquidity.
Acquisition of Tall Oak Midstream: Executed the acquisition of Tall Oak Midstream, increasing size and scale and enhancing exposure to natural gas-oriented basins.
Adjusted EBITDA Performance: Achieved fourth quarter adjusted EBITDA of $46.2 million and full year adjusted EBITDA of $204.6 million, generating over $85 million of distributable cash flow.
Well Expansion and Growth: Connected 156 new wells throughout the year, with significant volumetric growth in the Barnett and DJ Basin regions.
Volume Throughput Increase: Increased volume throughput on Double E by roughly 60% from Q4 2023 to Q4 2024, with confidence in filling existing capacity with long-term contracts.
2025 EBITDA Guidance Outlook: Announced 2025 adjusted EBITDA guidance of $245 million to $280 million, reflecting continued growth and operational momentum.
Well Connection Projections: Expect to connect 125 to 185 wells in 2025, with a strong pipeline of activity in the Rockies and Mid-Con regions.
Free Cash Flow Projections: Projected over $100 million of free cash flow in 2025, available for debt pay down and moving towards a 3.5 times leverage target.
Negative
Financial Challenges Ahead: Net loss of $24.8 million reported for Q4 2024, indicating financial challenges despite operational growth.
Adjusted EBITDA Analysis: Adjusted EBITDA for Q4 2024 was $46.2 million, which, while positive, reflects a reliance on previous segments that have since been divested.
EBITDA Decline in Rockies: The Rockies segment saw a decrease in adjusted EBITDA by $1.6 million from the previous quarter, primarily due to a 3% decline in liquids volumes and lower water sales.
Permian Basin EBITDA Decline: The Permian Basin segment reported a decrease in adjusted EBITDA of $0.7 million due to lower volume throughput on the Double E pipeline, indicating potential operational inefficiencies.
Piceance Segment Performance Decline: The Piceance segment experienced a decline in volume throughput and a slight increase in operating expenses, leading to a $1 million decrease in adjusted EBITDA compared to the previous quarter.
Piceance Region Decline: The company expects no new well connects in the Piceance region for 2025, which will likely result in further declines in volume and EBITDA compared to 2024.
EBITDA Guidance Uncertainty: The low-end of the 2025 adjusted EBITDA guidance reflects a 30% reduction in planned well connects activity, indicating uncertainty in production growth.
Capacity Constraints Impacting Growth: Despite the positive outlook, the company is facing capacity constraints in certain areas, leading some customers to moderate or defer development activity in 2025.
SMC FAQs
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SMC Earning Call Sentiment
Summit Midstream Corporation (SMC) Q4 2024 Earnings Call Transcript
SMC.N
1.68%Positive
The earnings call reveals strong financial performance with increased EBITDA, strategic acquisitions, and a reduction in leverage. Despite some challenges like competitive pressures and debt management, the company's clear growth strategy, positive cash flow generation, and shareholder return plans indicate a positive outlook. The absence of Q&A concerns further supports this sentiment.
