Energy Transfer LP - $ET - Earnings Analysis: Strong core business and capital management
Business Model
Energy Transfer LP generates revenue through a diversified portfolio of energy assets, including natural gas midstream, intrastate and interstate transportation and storage assets, crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets; and NGL fractionation.
Revenue Sources
- Natural Gas Transportation and Storage (Interstate and Intrastate)
- NGL and Refined Products Transportation and Services
- Crude Oil Transportation and Services
- Midstream Services (Gathering, Processing)
- Investment in Sunoco LP (SUN)
- Investment in USA Compression Partners, LP (USAC)
Income Statement Analysis
- Revenues decreased by 4.8% from Q4 2023 to Q4 2024, from 20,532 million to 19,541 million.
- Operating Income increased 5.26% from Q4 2023 to Q4 2024, from 2,165 million to 2,279 million.
- Net Income decreased by 7.66% from Q4 2023 to Q4 2024, from 1,567 million to 1,447 million.
- Net Income per Common Unit (Basic) decreased from $0.37 to $0.29.
Balance Sheet Analysis
- Total Assets increased by 10.28% from December 31, 2023 to December 31, 2024.
- Total Stockholders Equity increased by 4.73% from December 31, 2023 to December 31, 2024.
- Total Liabilities increased by 14.81% from December 31, 2023 to December 31, 2024.
Capital Allocation
Energy Transfer is focused on capital allocation and is expected to spend approximately $5.0 billion in 2025 on growth projects. The company is focused on Permian Basin development, Hugh Brinson Pipeline project, and natural gas and NGL infrastructure. It is balancing M&A and organic growth.
Management Commentary
Delivered FY’24 Adj. EBITDA¹ of $15.5B – a new partnership record
Growth Capital² was $3.0 billion – within guidance range of $2.8 – $3.0B
Increased to 4Q’24 quarterly cash distribution to $0.3225 per unit
Overall Sentiment: Positive, focused on growth in the Permian Basin, expansion of natural gas infrastructure and the development of NGL capabilities.
Recommendation
Rating: Hold
Reason for Rating: Energy Transfer has a strong core business, but is facing capital and is focused on M&A
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.
Generated on: 2/12/2025, 2:45:41 AM