SMC's Q3 Loss Narrows on Rising Volumes, Cash Flow Improves

Shares of Summit Midstream Corporation SMC have risen 10.8% since the company released its third-quarter 2025 results, outpacing the S&P 500 index’s 1.9% growth over the same period. Over the past month, the stock has risen 16%, outperforming the S&P 500’s 3.6% increase.In the latest quarter, SMC reported net income of $5 million, a sharp turnaround from the year-ago loss of $197.5 million. Total revenues increased 43% to $146.9 million from $102.4 million a year earlier. On a per-share basis, the company reported a loss of 13 cents, significantly narrower than the loss of $19.25 per share in the prior-year quarter. Adjusted EBITDA rose to $65.5 million compared with $45.2 million in the prior-year period, an increase of roughly 45%. Management attributed the gains to stronger natural gas volumes, improved product margins and the continued ramp-up of its Double E Pipeline. Distributable cash flow rose to $36.7 million from $22.1 million a year ago, while free cash flow increased to $16.7 million from $9.7 million.Summit Midstream Partners, LP Price, Consensus and EPS Surprise Summit Midstream Partners, LP price-consensus-eps-surprise-chart | Summit Midstream Partners, LP QuoteOther Key Business MetricsSMC recorded average daily natural gas throughput of 925 MMcf/d in the quarter, up from 667 MMcf/d in the prior-year period, reflecting the expansion of its footprint after recent acquisitions and increased activity across its systems. Liquids throughput was 72 Mbbl/d, modestly above the 70 Mbbl/d recorded a year ago. The Double E Pipeline set new records, transporting an average of 712 MMcf/d compared with 661 MMcf/d a year earlier, highlighting strong demand for Permian Basin takeaway capacity.Segment-level performance showed mixed but overall stronger results than a year ago. The Rockies segment’s adjusted EBITDA rose to $29.0 million from $24.9 million, driven by higher natural gas throughput and improved liquids pricing. The Permian segment delivered $8.7 million, slightly above last year’s $8.5 million, benefiting from increased volumes on Double E. Mid-Con EBITDA surged to $23.6 million from $7.3 million, primarily due to expanded operations after the Tall Oak acquisition earlier in 2025. The Piceance segment’s EBITDA was $12.5 million compared with $12.8 million in the year-ago quarter, reflecting lower throughput and deferred revenue recognition.Management CommentaryManagement emphasized continued operational momentum and robust customer activity across its systems. CEO Heath Deneke highlighted the company’s 21 new well connections during the quarter and the presence of five active drilling rigs behind SMC’s assets. He noted that adjusted EBITDA increased more than 7% from the second quarter, translating into an annualized run-rate of roughly $260 million. Deneke also confirmed expectations to finish the year near the low end of the company’s original adjusted EBITDA guidance range of $245 million to $280 million, due mainly to timing delays in customer activity rather than volume weakness.Management further signaled optimism for 2026, citing strong engagement from customers, more than 120 planned well connects for the first half of the year and the potential for significantly more activity as budgets are finalized. CFO Bill Mault added that capital spending in the quarter was concentrated on pad connections and compressor relocations, part of a broader initiative to reduce lease expenses and enhance margins starting in 2026.Factors Influencing the Headline NumbersQuarterly results benefited from higher natural gas throughput across several regions, particularly in the Rockies, where volumes increased 7.5% sequentially as wells connected earlier in the year reached peak production. Product margin also improved due to stronger realized NGL and condensate pricing, though this was partially offset by softer residue gas prices.In the Mid-Con region, results were bolstered by the integration of Tall Oak Midstream assets acquired in early 2025. This acquisition helped drive a substantial year-over-year increase in segment EBITDA and contributed to higher throughput volumes. The company also connected 12 new wells across the Arkoma and Barnett regions during the quarter, supporting higher system utilization.Double E Pipeline performance played a notable role, with average throughput increasing compared with both the prior quarter and the year-ago quarter. Higher take-or-pay commitments and stronger Permian basis differentials helped push the pipeline toward record usage levels.GuidanceSMC reaffirmed expectations that full-year adjusted EBITDA will come in near the low end of the $245 million to $280 million range due to short-term delays in well connections. However, the company expects well connections for 2025 to finish around the midpoint of its 125-185 target range. Management plans to issue its 2026 financial guidance with the company’s fourth-quarter earnings release in March 2026.Other DevelopmentsSMC continued to execute on integration and optimization initiatives following earlier acquisitions. Year-to-date capital expenditures included $9.5 million for integration efforts and compressor relocation projects, with seven latent compressors redeployed from the Piceance and two from the DJ Basin to the Arkoma, and an additional three units identified for future relocation. Management expects these initiatives to reduce compressor leasing costs by more than $4 million annually starting in 2026.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. 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