Summit Midstream Q2 Loss Narrows Y/Y, Revenues Climb, Stock Falls

Shares of Summit Midstream Corporation SMC have lost 14.6% since reporting second-quarter 2025 results, sharply underperforming the S&P 500 index’s 1% growth. Over the past month, the stock has fallen 18.4% against a 2.5% rally for the broader market, highlighting investor concerns about the company’s near-term performance despite ongoing strategic initiatives.Revenue & Earnings PerformanceSummit Midstream posted second-quarter revenues of $140.2 million, up 38% from $101.3 million in the year-ago period, driven by stronger gathering services and commodity sales. Despite this top-line growth, the company reported a net loss of $4.2 million, which was significantly narrower than the $23.8 million loss a year earlier. The company reported a loss of 66 cents per share, an improvement from the prior-year quarter’s loss of $2.91 per share. Adjusted EBITDA, a key metric for midstream operators, increased to $61.1 million from $43.1 million last year, reflecting improved system throughput and contributions from acquisitions.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 MetricsThroughput volumes expanded meaningfully. Aggregate natural gas throughput rose to 912 MMcf/d from 716 MMcf/d in the year-ago quarter, while liquids throughput increased 4% to 78 Mbbl/d. Segment-level results were mixed. Mid-Con adjusted EBITDA surged to $24.9 million from $5.4 million last year on stronger volumes and new well connections, while the Piceance segment declined to $10.5 million from $12.8 million due to higher costs and lower throughput. The Rockies segment benefited from the March 2025 Moonrise acquisition, boosting throughput but facing headwinds from weaker commodity prices, which reduced realized margins.Management CommentaryCEO Heath Deneke acknowledged that adjusted EBITDA of $61.1 million was “slightly below expectations,” citing the timing of well completions and weaker-than-anticipated realized commodity prices in the DJ Basin. He emphasized that these impacts are considered temporary, with volumes expected to recover in the second half of 2025 and into 2026. Management reiterated confidence in the asset base and highlighted strategic wins, including a 10-year extension of key gathering contracts in the Williston Basin and a new precedent agreement for 100 MMcf/d on the Double E Pipeline.Factors Influencing the ResultsCommodity price volatility weighed heavily on the company’s performance. In the Rockies, realized residue gas prices fell by about 40%, NGL prices by 10% and condensate prices by 15% from the prior quarter, reducing adjusted EBITDA by an estimated $2 million. Additionally, increased operating and administrative expenses, including roughly $1 million of one-time costs from the Moonrise integration, pressured profitability.Meanwhile, MVC (minimum volume commitment) shortfall payments contributed $4.2 million in gathering revenues in the quarter, underscoring the importance of contractual protections in stabilizing cash flows.GuidanceThe company expects 2025 adjusted EBITDA to land near the low end of its original guidance of $245-$280 million. This reflects management’s acknowledgment of delays in customer development programs despite an unchanged total well count for the year. Capital expenditure was $26.4 million in the second quarter, largely tied to Rockies and Mid-Con growth projects, with $5.5 million in maintenance spending. Liquidity remains adequate, with $20.9 million in cash and $359 million of revolver availability as of June 30, 2025.Other DevelopmentsStrategic initiatives remained a focus. The March 2025 Moonrise Midstream acquisition, valued at approximately $90 million, was successfully integrated into SMC’s Niobrara gathering and processing system. Additionally, in December 2024, the company completed the $425-million Tall Oak transaction, which extended its Class B share structure and positioned SMC for long-term growth. On the capital markets front, SMC was added to the Russell 3000, 2000 and Microcap indexes in June 2025, which management believes will broaden institutional ownership and improve liquidity in the stock.In summary, Summit Midstream’s second quarter showed strong year-over-year revenue growth and improved EBITDA, aided by acquisitions and system expansions. However, commodity price weakness, timing delays and integration costs weighed on profitability, prompting management to temper guidance expectations. With ongoing contract extensions, new commercial agreements and strategic acquisitions, the company is positioning itself for a stronger 2026, though near-term investor sentiment has clearly turned cautious.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>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 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