Enterprise Products Partners carries a $34 billion debt load into its October 29 earnings call while simultaneously funding a $6.5 billion project backlog, and whether those two realities can coexist without cracking the 27-year streak of distribution growth is exactly…
Enterprise Products Partners (NYSE:EPD | EPD Price Prediction) reports third-quarter results on Oct. 29. Units have gained 21% year to date. The report should demonstrate that a $6.5 billion project backlog can exist alongside with about $34 billion of debt.
A Record Quarter Fueled Partly by a Geopolitical Windfall
Last quarter brought EPS of $0.84 and revenue of $18.27B, up 60.8% year over year. Adjusted EBITDA hit a record $2.83B, and distributable cash flow covered the distribution 1.9x. Marine terminals handled 2.8 MMBPD, up 33%.
Middle East disruption caused much of that strength. Management tied about $200 million to April and May export demand and said those cash differentials have largely normalized. Marine volumes returned to normal by June and July.
Meanwhile, the backlog grew from $5.3B to $6.5B with two new Permian plants and a new Mont Belvieu fractionator. Units sit at $37.08, down 1.3% over the past month.
Consensus Points to Double-Digit Growth
Metric Estimate Prior-Year Actual Implied Growth Q3 2026 EPS $0.7344 $0.61 20.4% Q3 2026 Revenue $14.98B $12.02B 24.6% FY2026 EPS $3.065 $2.66 15.2% FY2026 Revenue $62.80B $52.60B 19.4%
Permian Throughput and Capex Discipline Will Set the Tone
Volumes come first for me. Permian inlet volumes rose 14% to 4.3 Bcf/d last quarter, and basin NGL pipelines run at 86% of capacity. Management noted about 2 Bcf/d of cutback gas that could return. The EIA expects Permian gas output to grow 6% this year on rising gas-to-oil ratios.
Next, the LPG export expansion is due by year-end and is about 90% signed. I’ll be watching for timing confirmation, since new industry export capacity could pressure terminal fees over the next 12 to 18 months.
The balance sheet matters just as much. Total debt was $34.0B at June 30 versus $34.9B at year-end 2025, with net leverage at the 3.0 target. About 97% of that debt is fixed rate at a 4.7% average cost, which cushions rate pressure. 2026 growth capex guidance stands at $2.9-$3.4B.
You should also look at capital returns. Buybacks totaled $159M in Q2, using 34% of the $5.0B authorization, alongside a $0.56 quarterly distribution. Co-CEO Jim Teague announced his retirement on the July 30 call, so leadership tone carries extra weight.
Free Cash Flow Promises Face a $3 Billion Spending Reality
A year ago, management called 2026 a “free cash flow inflection point.” Since then, growth capex rose by over $700 million, and co-CEO Randy Fowler said $3 billion might be the new level. Discretionary free cash flow could still approach the $1 billion area. If third-quarter EBITDA holds up without the spring windfall while debt remains flat, the volume-driven growth story behind 27 straight years of distribution increases looks durable heading into 2027.
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Source: 247wallst.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
