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By Brian Nelson, CFA
On July 30, Enterprise Products Partners (EPD) reported better than expected second quarter results with revenue and GAAP earnings per share exceeding the consensus forecast. Net income attributable to common unitholders was a record $1.8 billion, or $0.84 per diluted common unit, up 28%. Adjusted EBITDA hit a record high as well, coming in at $2.8 billion, up 17%. Operational DCF was a record $2.3 billion, which covered distributions declared by 1.9x. Adjusted CFFO was a record $2.5 billion, up 19%.
Management had the following to say about the results:
Enterprise reported strong volumes, earnings and cash flow for the second quarter of 2026. The partnership handled record pipeline and marine terminal volumes during the quarter due in part to strong international demand for U.S. energy in April and May. We also benefited from new assets and expansion projects that began operating and commissioning activities within the last twelve months including Frac 14 at our Mont Belvieu area complex and the expansions of our Neches River and Morgan’s Point Terminals. Total pipeline equivalent volumes for the quarter increased 8 percent to 14.7 MMBPD compared to the second quarter of 2025 while total marine terminal equivalent volumes increased 33 percent to 2.8 MMBPD compared to the second quarter of last year. We also reported a 14 percent increase in propylene production volumes to a record 134 MBPD during the second quarter of 2026 as we achieved higher utilization rates at our propylene production facilities. While not a record, inlet volumes to our natural gas processing plants increased to 8.1 Bcf/d in the second quarter of 2026 primarily due to a 14 percent increase in volume to our natural gas processing plants in the Permian Basin.
This volume growth, an increase in the value of our equity NGL production and higher marketing volumes and margins led to record earnings and cash flow in the second quarter of 2026. Operational distributable cash flow for the quarter increased 21 percent to a record $2.3 billion compared to the second quarter of last year. This provided 1.9 times coverage of the partnership’s cash distribution. In addition to $1.2 billion of cash distributions to unitholders, we retained $1.1 billion to apply to internally funded growth capital expenditures and buybacks.
I would like to congratulate our engineering and operations team for enabling Enterprise to respond to the acute global demand for U.S. energy by accelerating the completion of construction and beginning of commissioning activities for the expansion of our Neches River Terminal. Volumes at our marine terminals have returned to normal levels in June and July after the initial rush to backfill volumes affected by hostilities in the Middle East in April and May. Global shipping of energy, however, continues to be disrupted due to damage to production facilities and navigation restrictions in the Middle East, longer transits due to reroutes and the continuing uncertainty in the region.
During the quarter, we approved the construction of two new 300 MMcf/d gas processing plants located in the Permian Basin and a 150 MBPD NGL fractionator at our Mont Belvieu area complex. These assets support ongoing production growth in the Permian Basin and international demand for U.S NGLs. This brings the partnership’s total organic growth projects under construction to $6.5 billion. The next major capital project scheduled for completion is our expansion of the LPG export marine terminal on the Houston Ship Channel that is expected to begin operations by year end 2026.
During the quarter, common unit purchases were $159 million, and the partnership had 34% cumulative utilization of its $5 billion buyback program. The quarter, by key metrics, was a success, with Enterprise putting up record equivalent pipeline volumes and record marine terminal volumes. Capital expenditures for the second quarter of 2026 was $1.2 billion, and the partnership expects growth capital spending, net of $599 million of proceeds from asset sales, to be in the range of $2.9-$3.4 billion, and $600 million for sustaining capital expenditures in 2026. We liked Enterprise’s second quarter results, and the partnership remains a key holding in the High Yield Dividend Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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