Enbridge Inc (ENB), North America’s largest energy infrastructure company, reported a lower profit in the second quarter of 2021 than it had a year earlier, despite an increased demand for energy.
Enbridge’s operating revenue came in at C$10.9 billion in the quarter ended June 30, up 37.6% from C$8.0 billion in the prior-year quarter.
Meanwhile, the pipeline company reported a profit of nearly C$1.39 billion (C$0.69 per share) in the second quarter, a decrease of 15% from C$1.65 billion (C$0.82 per share) a year ago. The decline is in part due to lower foreign exchange gains.
On an adjusted basis, Enbridge earned C$0.67 per share in Q2 2021, down from an adjusted profit of C$0.56 in Q2 2020. This beat average analysts’ estimate of C$0.57.
Enbridge’s President and CEO Al Monaco said, “Following a strong start to the year, our four franchises delivered solid financial performance in the second quarter, with good operating performance and high utilization across our systems. The global economic recovery is now well underway, and our assets have been essential in assuring access to reliable and affordable conventional and renewable energy throughout this critical period.”
Monaco added that the company is on track to bring C$10 billion of projects into service this year and that management is reaffirming their full year 2021 financial guidance. They are confident that they will generate 5-7% distributable cash flow growth through 2023. (See Enbridge Inc stock charts on TipRanks)
Last week, Barclays analyst Christine Cho downgraded ENB to Hold from Buy with an unchanged C$50.00 price target. This implies 1.7% upside potential.
Cho stated that Enbridge’s business model has proven to be resilient, but those same characteristics of defensive assets limit the rise in earnings estimates. The analyst added that the stock is trading at a premium to its peers.
Overall, ENB scores a Strong Buy consensus rating among analysts, based on 9 Buys and 3 Holds. The average Enbridge price target of C$55.77 implies 13.4% upside potential to current levels.
TipRanks’ Smart Score
Enbridge scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.
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