Targa Resources Corp. TRGP reported fourth-quarter 2024 adjusted earnings of $1.44 per share, which missed the Zacks Consensus Estimate of $1.88 as Permian Basin volumes fell short of estimates.

However, the bottom line topped the year-ago quarter’s level of $1.23. The year-on-year increase in earnings can be attributed to robust NGL sales.

Total quarterly revenues increased to $4.4 billion from $4.2 billion in the prior-year quarter. The top line also beat the Zacks Consensus Estimate of $4.1 billion. The strong quarterly revenues can be attributed to higher sales of commodities and increased fees from midstream services.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Targa Resources, Inc. Price, Consensus and EPS Surprise

Targa Resources, Inc. price-consensus-eps-surprise-chart | Targa Resources, Inc. Quote

The company’s adjusted EBITDA for the fourth quarter totaled $1.1 billion, up from $959.9 million in the prior-year period.

A Closer Look at TRGP’s Q4 Results

On Jan. 16, 2025, Targa declared a quarterly cash dividend of 75 cents per common share, or $3 on an annualized basis for the fourth quarter of 2024. Total cash dividends of approximately $164 million were distributed on Feb. 14, 2025, to its shareholders of record as of the close of business on Jan. 31, 2025.

Targa repurchased 610,683 shares of its common stock in this quarter, spending approximately $108 million at an average price of $176.86 per share. As of Dec. 31, 2024, the company had a little over $1 billion remaining in its share repurchase program.

Targa reported record full-year and fourth-quarter Permian, NGL transportation, fractionation and LPG export volumes. Furthermore, the company completed its new 275 million cubic feet per day (MMcf/d) Greenwood II plant in Permian Midland and the 120,000 barrels per day (Bbl/d) Train 10 fractionator in Mont Belvieu and commenced operations of its new Bull Moose plant and 800 MMcf/d front-end treater in Permian Delaware.

Targa also announced the commencement of several new projects, like an intra-Delaware Basin through Grand Prix NGL Pipeline, a new 150 thousand Bbl/d fractionator in Mont Belvieu and the expansion of LPG export capabilities at Targa’s Galena Park Marine Terminal, which will increase capacity to approximately 19 million barrels per month.

TRGP’s Segmental Performance

Gathering and Processing: The segment recorded an operating margin of $598.9 million, up 11.75% from $536.3 million recorded in the year-ago period, though it missed the Zacks Consensus Estimate of $620 million.

The year-over-year outperformance reflects higher Permian Basin volumes that increased 14.9% year over year to an average of 6,065.2 MMcf/d but missed the consensus mark of 6,171 MMcf/d.

Logistics and Transportation: This unit reflects the company’s downstream operations. Its operating margin of $656.2 million increased 18.4% year over year and topped the Zacks Consensus Estimate of $624 million. The rise can be attributed to higher pipeline transportation and fractionation volumes and LPG export margins. Increased NGL supplies from Targa's Permian G&P operations and the completion of Targa’s Daytona NGL Pipeline also played their part.

TRGP’s fractionation volumes totaled 1,089.5 thousand barrels per day, up 29% from 844.8 thousand barrels per day recorded a year ago. The Zacks Consensus Estimate for the same was pegged at 1,023 thousand barrels per day. NGL pipeline transportation volumes rose 21% year over year, export volumes increased 5% and NGL sales saw a 9% improvement in the same period.

Costs, Capex & Balance Sheet

Targa incurred product costs of $2.9 billion in the fourth quarter, increased marginally by 1% from the year-ago quarter’s actual. At the same time, the company reported operating expenses of $305.8 million, up 13% from the year-ago quarter’s level of $269.5 million.

The company spent $819.7 million on growth capital programs compared with $636 million in the year-ago period.

As of Dec. 31, 2024, TRGP had cash and cash equivalents of $157.3 million and long-term debt of $13.8 billion, with a debt-to-capitalization of around 76.2%.

TRGP’s 2025 Guidance

For 2025, Targa projects its full-year adjusted EBITDA to range between $4.65 billion and $4.85 billion, with the midpoint reflecting a 15% increase compared to 2024. The company anticipates significant growth across its Permian G&P operations, driving record volumes in Permian production, NGL pipeline transportation, fractionation and LPG exports, surpassing the records set in 2024.

Targa's 2025 operational and financial outlook is based on the assumption that Waha natural gas prices will average $1.55 per MMBtu, NGL composite barrel prices will average $0.65 per gallon, and crude oil prices will be around $70 per barrel. Estimated net growth capital expenditures for 2025 are expected to be between $2.6 billion and $2.8 billion, incorporating investments in projects such as the Delaware Express, Train 12 and GPMT LPG Export Expansion. Additionally, net maintenance capital expenditures are projected to be approximately $250 million.

For the first quarter of 2025, Targa plans to propose a 33% increase in its quarterly common dividend to $1.00 per share ($4.00 per share annualized) to its board of directors. If approved, this increase will take effect in Q1 2025, with payment scheduled for May. Looking ahead, Targa aims to further enhance shareholder returns through higher dividends and strategic share repurchases.

TRGP’s Zacks Rank and Other Key Midstream Service Players

TRGP currently has a Zacks Rank #2 (Buy).

Some other Midstream Service players that also reported their respective earnings are MPLX LP MPLX, Cheniere Energy, Inc. LNG and TC Energy Corporation TRP.

You can see the complete list of today’s Zacks #1 Rank stocks here.

MPLX LP (MPLX), the Findlay, OH-based midstream energy services company, reported fourth-quarter 2024 earnings of $1.07 per unit, which topped the Zacks Consensus Estimate of $1.04. The bottom line, however, declined from the year-ago quarter’s level of $1.10.

Total quarterly revenues of $3.06 billion missed the Zacks Consensus Estimate of $3.08 billion. The top line, however, increased from the prior-year level of $2.97 billion.

Better-than-expected quarterly earnings were primarily driven by higher throughputs and increased contributions from the partnership’s newly acquired assets in the Utica and Permian Basins. The positives were partially offset by increased total costs and expenses.

Houston, TX-based Cheniere Energy, Inc. (LNG) reported a fourth-quarter 2024 adjusted profit of $4.33 per share, which beat the Zacks Consensus Estimate of $2.69. The outperformance can be attributed to strength in liquefied natural gas (‘LNG’) shipments. During the period, Cheniere Energy loaded 606 trillion British thermal units (TBtu) of LNG, ahead of the consensus mark of 582 TBtu.

However, the bottom line decreased from the year-ago quarter’s level of $5.76 per share. This was due to an increase in operating costs and expenses.

As of Dec. 31, 2024, Cheniere had approximately $2.6 billion of cash and cash equivalents. Its net long-term debt amounted to $22.6 billion, with a debt-to-capitalization of 69.2%.

Meanwhile, natural gas transmission company TC Energy Corporation (TRP) reported fourth-quarter 2024 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 68 cents. This better-than-expected performance was driven by robust results from the company’s Mexico Natural Gas Pipelines, and Power and Energy Solutions segments.

However, the bottom line decreased from 99 cents reported in the year-ago period. This year-over-year decline can be attributed to weak results in the Canadian Natural Gas Pipelines and U.S. Natural Gas Pipelines segments.

This North America’s energy infrastructure provider's quarterly revenues of $2.6 billion outpaced the Zacks Consensus Estimate by $130 million. However, the figure decreased 17.8% year over year. TC Energy’s comparable EBITDA was C$2.6 billion, slightly down from C$2.7 billion in the previous year.

In addition, TRP’s board of directors declared a quarterly dividend of 85 Canadian cents per common share for the quarter ending March 31, 2025. This represents a 3.3% increase from the previous quarter and the dividend will be payable on March 31 to its shareholders of record as of March 14. This dividend increase followed the company’s proportional allocation post-spinoff, bringing the annualized dividend to C$3.40 per share.

In the fourth quarter of 2024, Bruce Power achieved an impressive 99% availability. The cogeneration power plant fleet also performed well, reaching 98% availability, thanks to a decrease in forced outages and the successful completion of planned maintenance.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

TC Energy Corporation (TRP) : Free Stock Analysis Report

Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report

MPLX LP (MPLX) : Free Stock Analysis Report

Targa Resources, Inc. (TRGP) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research