USA Compression Partners (NYSE: USAC) reported Q3 EPS of ($0.06), $0.01 better than the analyst estimate of ($0.07). Revenue for the quarter came in at $161.7 million versus the consensus estimate of $161.58 million.

Third Quarter 2020 Highlights

• Total revenues were $161.7 million for the third quarter 2020, compared to $175.8 million for the third quarter 2019.
• Net income was $6.5 million for the third quarter 2020, compared to $13.3 million for the third quarter 2019.
• Net cash provided by operating activities was $48.2 million for the third quarter 2020, compared to $61.3 million for the third quarter 2019.
• Adjusted EBITDA was $103.9 million for the third quarter 2020, compared to $104.3 million for the third quarter 2019.
• Distributable Cash Flow was $56.9 million for the third quarter 2020, compared to $54.9 million for the third quarter 2019.
• Announced cash distribution of $0.525 per common unit for the third quarter 2020, consistent with the third quarter 2019.
• Distributable Cash Flow Coverage was 1.12x for the third quarter 2020, compared to 1.08x for the third quarter 2019.

“USA Compression’s third quarter reflected the stability that is inherent in our compression services business, which since our founding has been focused on large horsepower, infrastructure-oriented natural gas applications. This emphasis results in solid revenues and cash flows as well as attractive operating margins,” commented Eric D. Long, USA Compression’s President and Chief Executive Officer. “The broader natural gas market demonstrated meaningful resiliency during the quarter, with less-than-anticipated demand destruction and improving commodity pricing as we neared the end of the quarter, which has continued into the current period. Natural gas remains an important clean-burning fuel whose use in this country and globally will continue to be critical for power generation and industrial purposes for years to come.”

He continued, “Our continued focus on expenses and capital allocation led to strong operating margins, even in a period of decreased revenues. Over the course of the third quarter, we saw business activity with our customers begin to pick up, with additional unit deployments and increased quote activity. While many of our customers are presently in the midst of their budget process and have not yet committed to spending plans and targets for next year, we expect the positive macro environment to lend support to our business as we enter 2021.”

“Expectations for a tight supply-demand balance have helped push up futures prices to more attractive levels as we enter the winter heating season. We have seen the anticipated declines of gas volumes from associated gas fields like the Permian and the Mid-Continent, and as expected, other areas, including Appalachia and the Haynesville have stepped in to help bridge the supply gap. Our diversified footprint provides us the opportunity to focus our resources in the most active areas.”

Full-Year 2020 Outlook

USA Compression is updating its full-year 2020 guidance as follows:

• Net loss range of $600.0 million to $590.0 million;
• A forward-looking estimate of net cash provided by operating activities is not provided because the items necessary to estimate net cash provided by operating activities, in particular the change in operating assets and liabilities, are not accessible or estimable at this time. The Partnership does not anticipate the changes in operating assets and liabilities to be material, but changes in accounts receivable, accounts payable, accrued liabilities and deferred revenue could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected Adjusted EBITDA and Distributable Cash Flow;
• Adjusted EBITDA range of $405.0 million to $415.0 million; and
• Distributable Cash Flow range of $210.0 million to $220.0 million.

For earnings history and earnings-related data on USA Compression Partners (USAC) click here.