By Robb M. Stewart

Pembina Pipeline's shares ticked higher after the pipeline operator flagged underlying earnings for the year were tracking toward the midpoint of a narrowed target.

In early trading, the shares were 1% higher at $40.94 in New York, widening the advance so far this year to 19%. On the Toronto Stock Exchange, the shares were up 0.1%t C$56.63, recovering from a fall at the opening bell.

Pembina's third-quarter earnings rose to 385 million Canadian dollars ($276 million) from C$346 million a year earlier, but fell short of the C$411.8 million analysts anticipated.

Stripping out items including the effects of derivative instruments and acquisition activity, earnings before interest, taxes, depreciation and amortization was little changed at C$1.02 billion. That was below the C$1.06 billion mean estimate of analysts polled by FactSet.

Revenue was 27% higher for the three months at C$1.84 billion.

The quarter buoyed by increased volumes following a roughly C$3.1 billion deal that saw Pembina buy the stakes in three joint ventures held by Enbridge, though that was partly offset by lower recontracted tolls and lower volumes on Pembina's Cochin pipeline in western Canada.

Pembina said it was headed toward the mid-point of an adjusted Ebitda target for the year of between C$4.23 billion and C$4.33 billion, narrowed from C$4.2 billion to C$4.35 billion previously.

Despite a tough quarter, the longer-term outlook for Pembina remains intact, Michael Barth, an analyst at Raymond James, said. He said much of the miss against expectations in the third quarter was due to transient items that should reverse in the final quarter of the year.

Raymond James affirmed an outperform stance on Pembina's shares but trimmed its target by C$1 to C$62. Analysts at Jefferies similarly reiterated a buy call on the stock, with a C$61 target.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

November 07, 2024 10:28 ET (15:28 GMT)

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