While the second quarter was an abysmal one for the oil sector, it had a minimal effect on Enbridge‘s (NYSE:ENB) financial results thanks to its durable business model. The Canadian energy infrastructure giant remains on track to achieve its full-year forecast. Add that to its excellent financial profile and visible growth prospects, and the company’s 7.4%-yielding dividend is on rock-solid ground.
Drilling down into Enbridge’s second-quarter results
Data source: Enbridge. NOTE: All figures in Canadian dollars. Current exchange rate CA$1 = US$0.75.
Enbridge generated impressive second-quarter results as its earnings and cash flow increased during a brutally challenging period for the energy sector. Powering its strong performance amid the storm was the overall durability of its diversified operations:
Data source: Enbridge.
Earnings from liquids pipelines dipped by about 1% due primarily to lower volumes because of the turbulent market conditions. However, the company offset much of this impact thanks to the strength of its contract profile.
Gas transmission and midstream earnings increased by 4% year over year. Fueling that growth were higher rates on its Texas Eastern system, the contribution of new assets, and a stronger U.S. dollar, which offset the sale of its Canadian gathering and processing assets.
Gas distribution and storage earnings also rose by about 4%. This business benefited from colder weather during the period, customer growth, higher rates, and cost savings.
Earnings from Enbridge’s renewable power business surged 50% year over year. Strong wind resource conditions in the U.S. and its recently completed offshore wind farms in Germany contributed to that increase.
Finally, energy services earnings dipped about 2% year over year as lower regional oil prices offset the company’s ability to capture storage opportunities.
Image source: Getty Images.
A look at what’s ahead for Enbridge
“In the face of the worst energy downturn our industry has ever experienced, the strength and resilience of our assets was demonstrated once again in the second quarter, with solid financial results,” stated CEO Al Monaco. Overall, Enbridge’s results exceeded its expectations for the quarter and the first half of the year. Now the company expects to achieve its full-year distributable cash flow guidance range of CA$4.50 to CA$4.80 per share ($3.37 to $3.59 per share) despite some headwinds it sees ahead for the second half.
Enbridge also made excellent progress on its expansion program during the first half of the year. It’s currently working on CA$11 billion ($8.2 billion) of expansion projects that should start up through 2022. That’s about CA$1 billion ($750 million) above where it began the quarter as the company secured four new gas utility projects and approved another European offshore wind farm.
The company also took advantage of low interest rates to raise CA$6.9 billion ($5.2 billion) of capital during the first half of this year. As a result, it now has about CA$14 billion ($10.5 billion) of liquidity, enough funding to meet its needs through 2021.
With this foundation, Enbridge is increasingly confident in its long-term growth prospects. The company believes that it can grow its distributable cash flow per share at a 5% to 7% annual rate through 2022. With a strong balance sheet and relatively conservative payout ratio, Enbridge should be able to continue increasing its dividend, which it has done for the last 25 straight years.
Rock solid amid a raging storm
Enbridge’s business model proved to be unshakable during the worst downturn in the sector’s history. That’s keeping its big-time dividend on rock-solid ground. Meanwhile, with a strong financial profile and growth prospects, that payout appears to be headed higher in the coming years. So it’s an ideal stock for dividend investors to buy these days.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
