SMC Gains 6.9% on Y/Y Revenue Growth in Q1 Despite Earnings Drop

Shares of Summit Midstream Corporation SMC have gained 6.9% since reporting results for the first quarter of 2025. This compares with the S&P 500 index’s 3.8% growth over the same time frame. Over the past month, the stock has gained 6.1% compared with the S&P 500’s 8.1% rally.Revenue & Earnings OverviewFor the first quarter ended March 31, 2025, Summit Midstream reported total revenues of $132.7 million, up 11.6% from $118.9 million in the same period a year ago. The increase was driven by higher commodity sales and gathering fees across several segments. Natural gas, NGLs and condensate sales rose 20.8% year over year to $59.3 million, whereas gathering services’ revenues increased to $64.2 million from $62 million in the prior-year period.Despite top-line growth, net income declined sharply to $4.6 million from $132.9 million in the year-ago quarter due to large asset sale-related gains recorded in the first quarter of 2024. Diluted earnings per share (EPS) dropped to a loss of 16 cents, compared to a profit of $11.47 in the previous year. Adjusted EBITDA, a key non-GAAP performance metric, fell to $57.5 million from $70.1 million, reflecting the divestiture of the Northeast operations and other timing-related impacts.Other Key Business MetricsAdjusted EBITDA by segment reflected a mixed performance. The Mid-Con segment delivered $22.5 million in adjusted EBITDA, up $9.6 million from the previous quarter, largely driven by the full-quarter contribution of Tall Oak Midstream and increased throughput. The Rockies segment posted Adjusted EBITDA of $24.9 million, up $1.6 million sequentially, supported by higher liquid volumes and contributions from the Moonrise Midstream acquisition. Meanwhile, Piceance remained flat at $11.8 million despite a 4% decline in throughput, and the Permian segment contributed $8.3 million, a modest increase from the prior quarter.Capital expenditure for the quarter totaled $20.6 million, primarily allocated to pad connections and a $10-million optimization project in the Rockies segment. Of this, $2.5 million was classified as maintenance capital.On the operating front, Summit connected 41 wells in the quarter — 22 in the DJ Basin, 8 in the Williston and 11 in the Mid-Con segment — consistent with management’s expectations. Natural gas throughput rose 19.8% sequentially to 883 MMcf/d, whereas liquid volumes increased 8.8% to 74 Mbbl/d.Management CommentaryCEO Heath Deneke expressed confidence in the company's performance and future positioning. He noted that most wells anticipated in the crude-oriented Rockies segment for the first half had already come online and that customers had not indicated major changes to their plans for the second half despite falling crude prices. Deneke added that the Mid-Con segment, weighted toward natural gas, is well-positioned to benefit from expected Gulf Coast demand growth.Management also emphasized the benefits of recent strategic actions, including the Moonrise and Tall Oak acquisitions, and noted that approximately 50% of Summit Midstream’s operations are now tied to natural gas, offering some insulation from crude price volatility.Factors Influencing Headline NumbersThe year-over-year earnings drop was led primarily by non-recurring gains in the first quarter of 2024, namely the $86.2-million gain from the Utica midstream business sale and $126.3 million from the disposition of Ohio Gathering. Excluding those one-time items, the operational performance was solid, supported by steady rig activity and infrastructure expansion. The quarter also included $2.8 million in transaction costs and $1.2 million in integration expenses tied to the Moonrise acquisition.The drop in EPS was also driven by an increase in general and administrative expenses, which grew to $16.6 million from $14.8 million, along with higher operations and maintenance costs resulting from expanded operations.GuidanceSummit Midstream reiterated its 2025 adjusted EBITDA guidance of $245-$280 million and capital expenditure of $65-$75 million. Management noted that if all second-half Rockies wells were deferred due to continued crude weakness, results would trend toward the lower end of the EBITDA range.Other DevelopmentsSummit Midstream closed its $90-million acquisition of Moonrise Midstream on March 10, 2025. The deal, which included a $70-million cash payment and 462,265 shares of common stock, expands Summit Midstream’s footprint in the DJ Basin and offers new operating synergies.No new divestitures occurred in the quarter, although the full impacts of the 2024 Tall Oak and Utica transactions continue to reshape the company’s geographic and commodity exposure.Summit Midstream enters the rest of 2025 with a reshaped portfolio, balanced exposure to natural gas and a watchful eye on crude price volatility — all while maintaining strong liquidity and operational momentum.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Summit Midstream Partners, LP (SMC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks