South Bow (NYSE:SOBO) Releases Quarterly Earnings Results, Misses Estimates By $0.02 EPS

Key Points

• South Bow missed quarterly earnings expectations, reporting $0.44 EPS versus the $0.46 consensus estimate. Revenue came in at $491.0 million, essentially in line with expectations but up 1.0% year over year.
• The stock traded lower after the report, falling 1.1% to $34.72 on Friday. South Bow now has a market cap of about $7.24 billion and a 52-week range of $24.51 to $35.56.
• The company declared a quarterly dividend of $0.50 per share, or $2.00 annually, for a yield of about 5.8%. However, the payout ratio is high at 98.52%, which may limit flexibility.

South Bow (NYSE:SOBO - Get Free Report) announced its quarterly earnings data on Thursday. The company reported $0.44 earnings per share for the quarter, missing the consensus estimate of $0.46 by ($0.02), Zacks reports. The company had revenue of $491.00 million for the quarter, compared to analysts' expectations of $491.21 million. South Bow had a return on equity of 15.24% and a net margin of 21.32%.The company's revenue was up 1.0% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.47 earnings per share.

South Bow Trading Down 1.1%

SOBO traded down $0.40 on Friday, reaching $34.72. 986,275 shares of the company's stock were exchanged, compared to its average volume of 1,031,318. The company's 50 day moving average is $33.18 and its 200-day moving average is $29.53. The company has a market cap of $7.24 billion, a price-to-earnings ratio of 17.10 and a beta of 0.11. South Bow has a twelve month low of $24.51 and a twelve month high of $35.56. The company has a debt-to-equity ratio of 2.13, a quick ratio of 1.43 and a current ratio of 1.50.

South Bow Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, July 15th. Investors of record on Tuesday, June 30th will be given a dividend of $0.50 per share. This represents a $2.00 dividend on an annualized basis and a yield of 5.8%. The ex-dividend date of this dividend is Tuesday, June 30th. South Bow's dividend payout ratio is 98.52%.

Institutional Trading of South Bow

A number of institutional investors and hedge funds have recently bought and sold shares of SOBO. Parkside Financial Bank & Trust grew its position in South Bow by 10.0% in the fourth quarter. Parkside Financial Bank & Trust now owns 3,770 shares of the company's stock valued at $104,000 after acquiring an additional 344 shares in the last quarter. Quantinno Capital Management LP grew its position in South Bow by 4.9% in the second quarter. Quantinno Capital Management LP now owns 10,175 shares of the company's stock valued at $264,000 after acquiring an additional 478 shares in the last quarter. LPL Financial LLC grew its position in South Bow by 1.6% in the fourth quarter. LPL Financial LLC now owns 38,499 shares of the company's stock valued at $1,058,000 after acquiring an additional 615 shares in the last quarter. Commonwealth Equity Services LLC grew its position in South Bow by 0.9% in the fourth quarter. Commonwealth Equity Services LLC now owns 71,693 shares of the company's stock valued at $1,969,000 after acquiring an additional 656 shares in the last quarter. Finally, Ameriprise Financial Inc. grew its position in South Bow by 4.2% in the second quarter. Ameriprise Financial Inc. now owns 24,292 shares of the company's stock valued at $629,000 after acquiring an additional 988 shares in the last quarter.

Analyst Ratings Changes

Several brokerages have recently weighed in on SOBO. TD Securities reiterated a "hold" rating on shares of South Bow in a report on Friday, May 1st. Weiss Ratings upgraded shares of South Bow from a "hold (c+)" rating to a "buy (b-)" rating in a report on Friday, February 20th. Wall Street Zen lowered shares of South Bow from a "hold" rating to a "sell" rating in a report on Saturday. Scotiabank increased their target price on shares of South Bow from $34.00 to $36.00 and gave the stock a "sector perform" rating in a research report on Friday. Finally, National Bank Financial increased their target price on shares of South Bow from $29.00 to $30.00 and gave the stock a "sector perform" rating in a research report on Monday, March 16th. Three equities research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and four have given a Sell rating to the company's stock. Based on data from MarketBeat, South Bow currently has a consensus rating of "Reduce" and an average target price of $30.63.

South Bow News Summary

Here are the key news stories impacting South Bow this week:

• Positive Sentiment: South Bow declared a quarterly dividend of 0.50 per share, implying an annualized yield of about 5.7%, which should appeal to income-focused investors. Dividend declaration article
• Positive Sentiment: The company said it is beginning efforts to secure required permits for its Prairie Connector pipeline project, a step that could support longer-term growth if the cross-border project advances. Permitting article
• Neutral Sentiment: Shareholders approved all resolutions at South Bow’s annual general meeting, indicating normal governance progress without a major surprise. AGM resolutions article
• Neutral Sentiment: Investors also watched for valuation commentary following Q1 earnings and continued progress on pipeline-related opportunities, but these items appear secondary to the earnings report itself. Valuation commentary article
• Negative Sentiment: South Bow’s Q1 report missed analyst estimates on earnings and slightly missed revenue expectations, with year-over-year declines in earnings and net income weighing on sentiment. Q1 earnings miss article

About South Bow

South Bow Corp is a strategic liquids pipeline company. It is a new liquids-focused midstream infrastructure company. South Bow Corp is based in Canada.

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