Targa Resources Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Core Insights - Targa Resources Corp. (TRGP) reported fourth-quarter 2024 adjusted earnings of $1.44 per share, missing the Zacks Consensus Estimate of$1.88, but showing an increase from $1.23 in the same quarter last year, driven by strong NGL sales [1] - Total quarterly revenues rose to$4.4 billion from $4.2 billion year-over-year, exceeding the Zacks Consensus Estimate of$4.1 billion, attributed to higher commodity sales and increased midstream service fees [2] - The company's adjusted EBITDA for the fourth quarter reached $1.1 billion, up from$959.9 million in the prior-year period [3] Financial Performance - Targa declared a quarterly cash dividend of 75 cents per common share for Q4 2024, amounting to approximately $164 million distributed to shareholders [4] - The company repurchased 610,683 shares at an average price of$176.86 per share, spending about $108 million, with over$1 billion remaining in its share repurchase program as of December 31, 2024 [5] - Targa reported record full-year and fourth-quarter volumes in Permian, NGL transportation, fractionation, and LPG exports, with significant new projects completed [6][7] Segment Performance - The Gathering and Processing segment had an operating margin of $598.9 million, up 11.75$620 million, with Permian Basin volumes increasing 14.9% to an average of 6,065.2 MMcf/d [8] - The Logistics and Transportation segment's operating margin was $656.2 million, an 18.4$624 million, driven by higher pipeline transportation and fractionation volumes [9] - Fractionation volumes totaled 1,089.5 thousand barrels per day, a 29% increase from the previous year, exceeding the consensus estimate of 1,023 thousand barrels per day [10] Costs and Capital Expenditures - Targa incurred product costs of $2.9 billion in Q4, a marginal increase of 1$305.8 million [12] - The company spent $819.7 million on growth capital programs, compared to$636 million in the prior-year period [12] - As of December 31, 2024, Targa had cash and cash equivalents of $157.3 million and long-term debt of$13.8 billion, with a debt-to-capitalization ratio of approximately 76.2% [13] 2025 Guidance - For 2025, Targa projects full-year adjusted EBITDA between $4.65 billion and$4.85 billion, reflecting a 15% increase compared to 2024, with expectations of record growth in Permian G&P operations [14] - Estimated net growth capital expenditures for 2025 are projected to be between $2.6 billion and$2.8 billion, with maintenance capital expenditures around $250 million [15] - Targa plans to propose a 33$1.00 per share for Q1 2025, pending board approval [16]