Suburban Propane Partners (NYSE:SPH) Issues Earnings Results

Key Points

• Suburban Propane Partners beat earnings expectations, reporting $2.06 EPS versus the $1.74 consensus, though revenue of $551.21 million came in below the $575 million forecast.
• Operations were steady and distributions remained strong, with adjusted EBITDA of $175.3 million in the quarter and the board declaring a quarterly distribution of $0.325 per unit.
• The company is seeing growth in renewable natural gas, as RNG injections increased and two projects are on track to add about 200,000 MMBTUs annually later this year, even as propane inventory levels and price volatility remain a headwind.

Suburban Propane Partners (NYSE:SPH - Get Free Report) posted its quarterly earnings data on Thursday. The energy company reported $2.06 earnings per share for the quarter, topping analysts' consensus estimates of $1.74 by $0.32, FiscalAI reports. Suburban Propane Partners had a return on equity of 20.39% and a net margin of 9.57%.The company had revenue of $551.21 million during the quarter, compared to analysts' expectations of $575.00 million.

Here are the key takeaways from Suburban Propane Partners' conference call:

• Adjusted EBITDA of $175.3 million in 2Q was essentially flat year-over-year, with YTD adjusted EBITDA of $258.7 million (up 3.4%), and the board declared a quarterly distribution of $0.325 per unit with trailing 12‑month coverage of 2.2x.
• The RNG platform is gaining traction — average daily D3 RNG injections rose ~16% sequentially and >12% year-over-year, the partnership recognized $3.5 million of PTCs for Stanfield, and two RNG projects (Upstate NY and Columbus) are on schedule to add ~200,000 MMBTUs annually in H2.
• Weather was a tale of two regions (east volumes +3%, west volumes −10%), leaving retail gallons sold roughly flat at 161.6 million, while U.S. propane inventories are elevated at 77 million barrels (75% higher YoY, 47% above the five‑year average), contributing to a 23% YoY decline in average wholesale prices and continued price volatility.
• Management used excess operating cash to repay $64.3 million of revolver borrowings, improving trailing 12‑month leverage to 4.34x, and maintains ample revolver capacity and disciplined capex (RNG growth capex of $90 million YTD) to support strategic growth.

Suburban Propane Partners Price Performance

Shares of SPH traded up $0.01 during mid-day trading on Friday, hitting $19.61. The company's stock had a trading volume of 162,019 shares, compared to its average volume of 120,886. The company has a current ratio of 0.87, a quick ratio of 0.61 and a debt-to-equity ratio of 2.11. The firm has a 50-day simple moving average of $19.95 and a 200 day simple moving average of $19.44. The firm has a market capitalization of $1.30 billion, a P/E ratio of 9.86 and a beta of 0.42. Suburban Propane Partners has a 1-year low of $17.30 and a 1-year high of $20.80.

Suburban Propane Partners Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, May 12th. Stockholders of record on Tuesday, May 5th will be issued a $0.325 dividend. This represents a $1.30 annualized dividend and a dividend yield of 6.6%. The ex-dividend date of this dividend is Tuesday, May 5th. Suburban Propane Partners's dividend payout ratio (DPR) is currently 64.04%.

Analyst Ratings Changes

A number of research firms have weighed in on SPH. Argus raised Suburban Propane Partners to a "strong-buy" rating in a research report on Wednesday, January 21st. Zacks Research raised Suburban Propane Partners from a "hold" rating to a "strong-buy" rating in a research report on Monday, April 20th. Finally, Weiss Ratings raised Suburban Propane Partners from a "hold (c+)" rating to a "buy (b)" rating in a research report on Wednesday, February 18th. Two equities research analysts have rated the stock with a Strong Buy rating and one has given a Buy rating to the stock. According to data from MarketBeat.com, Suburban Propane Partners has a consensus rating of "Strong Buy".

Institutional Trading of Suburban Propane Partners

Hedge funds have recently modified their holdings of the business. Truvestments Capital LLC acquired a new stake in shares of Suburban Propane Partners in the 4th quarter valued at approximately $37,000. Triumph Capital Management purchased a new position in Suburban Propane Partners in the 3rd quarter valued at approximately $50,000. Advisory Services Network LLC purchased a new position in Suburban Propane Partners in the 3rd quarter valued at approximately $62,000. Northwestern Mutual Wealth Management Co. increased its stake in Suburban Propane Partners by 669.5% in the 3rd quarter. Northwestern Mutual Wealth Management Co. now owns 4,671 shares of the energy company's stock valued at $87,000 after purchasing an additional 4,064 shares in the last quarter. Finally, Steward Partners Investment Advisory LLC increased its stake in Suburban Propane Partners by 11.8% in the 4th quarter. Steward Partners Investment Advisory LLC now owns 7,175 shares of the energy company's stock valued at $133,000 after purchasing an additional 757 shares in the last quarter. 30.94% of the stock is owned by institutional investors and hedge funds.

Suburban Propane Partners Company Profile

Suburban Propane Partners L.P. NYSE: SPH is a publicly traded master limited partnership headquartered in Whippany, New Jersey, that provides propane and related energy services to residential, commercial, industrial and agricultural customers. As one of the largest propane retailers in the United States, the company delivers propane gas, heating oil, diesel fuel and natural gas throughout its service territories. In addition to fuel distribution, Suburban Propane offers HVAC installation, maintenance and repair services, as well as safety inspections and equipment leasing to support customers' energy needs.

The company's core business centers on the delivery of propane for space and water heating, cooking and agricultural applications.

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