AM Q2 Earnings Miss on Higher Costs, Revenues Beat Estimates

Antero Midstream Corporation AM reported second-quarter 2026 earnings of 24 cents per share, which missed the Zacks Consensus Estimate of 27 cents by 11.1%. The bottom line declined 7.7% from 26 cents in the year-ago quarter.

Revenues of $327.24 million beat the consensus mark of $322.31 million by 1.5%. The top line increased 7.1% from $305.47 million a year ago.

Higher gathering and compression volumes supported the top line, while elevated operating and interest expenses weighed on earnings. Processing and fractionation capacity remained fully utilized.

Antero Midstream Corporation Price, Consensus and EPS Surprise

Antero Midstream Corporation price-consensus-eps-surprise-chart | Antero Midstream Corporation Quote

AM's Gathering Revenues Benefit From Higher Throughput

Gathering and compression revenues from Antero Resources rose to $271.51 million from $248.90 million a year ago. The reported figure was above our estimate of $260 million. The increase reflected stronger system activity and a 3% rise in the average realized gathering fee to 37 cents per Mcf. Average daily gathering volumes increased 19% to 4,124 million cubic feet per day (MMcf/d) from the year-ago level of 3,460 MMcf/d, setting a company record. This exceeded our estimate of 3,587 MMcf/d. The high-pressure gathering volumes declined 7% to 2,986 MMcf/d.

Compression volumes rose 17% to 4,036 MMcf/d compared with 3,447 MMcf/d a year ago, aided by 747 MMcf/d of well pad compression. The figure was above our estimate of 3,578 MMcf/d. Centralized compression volumes fell 5% to 3,289 MMcf/d.

Antero Midstream's Water Mix Shifts Further

Water handling revenues from Antero Resources increased to $78.54 million from $73.77 million in the prior-year quarter. The reported figure was above our estimate of $75.5 million. The segment benefited from a sharp increase in other water handling activity, which includes cost-plus services.

Other water handling volumes surged 131% to 136 thousand barrels per day (MBbl/d). Fresh water delivery volumes declined 16% to 82 MBbl/d. The average realized fresh water delivery fee increased 2% to $4.44 per barrel from the year-ago figure of $4.37 per barrel, reflecting annual CPI-based adjustments.

AM's Operating Costs Pressure Quarterly Profit

Total operating expenses rose to $145.34 million from $119.03 million a year ago. Direct operating expenses increased to $84.53 million from $63.11 million, with water handling accounting for $47.99 million and gathering and processing contributing $36.53 million.

Operating income decreased to $181.91 million from $186.44 million. Net interest expense increased 16% to $55.68 million, driven by financing for the HG Energy acquisition. Equity in earnings of unconsolidated affiliates declined to $28.53 million from $30.02 million.

Antero Midstream Generates Solid Free Cash Flow

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 2% year over year to $288.78 million. Adjusted free cash flow before dividends was $186.43 million, while adjusted free cash flow after dividends totaled $79.63 million.

Capital expenditures were $46.68 million on an accrual basis. The company invested $33 million in gathering and compression and $14 million in water infrastructure.

AM Strengthens Balance Sheet Through Debt Reduction

As of June 30, 2026, total debt was $3.59 billion, including $341.90 million outstanding under the bank credit facility. The company had no cash, cash equivalents or restricted cash at quarter-end.

In July, Antero Midstream received about $371 million in damages and interest from Veolia. The proceeds, together with revolver borrowings, are being used to redeem $650 million of senior notes due 2028 at par. Management expects leverage to fall below its 3.0-times target, while liquidity remains above $600 million with no near-term maturities.

Antero Midstream Advances Capital Return Strategy

Antero Midstream repurchased 400,000 shares for about $8 million and has roughly $310 million remaining under its buyback authorization.

AM Advances Pipeline Growth & Integration

During the quarter, AM began construction on East Side Express, its first intrastate regional pipeline. The bi-directional project is designed to improve dry gas connectivity to long-haul and regional pipelines and support future demand growth in West Virginia.

Management said water integration projects remain on track and that it expects higher gathering and water volumes to drive second-half EBITDA growth within the full-year guidance range. The company connected 26 wells to its gathering system and serviced 21 wells with fresh water delivery.

AM’s Zacks Rank & Key Picks

Antero Midstream currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are NOV Inc. NOV, HF Sinclair Corporation DINO and Cactus, Inc. WHD. NOV sports a Zacks Rank #1 (Strong Buy), while DINO and WHD carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks Rank #1 stocks here.

NOV reported second-quarter 2026 adjusted earnings of 31 cents per share, which beat the Zacks Consensus Estimate of 16 cents per share.

As of June 30, 2026, NOV had long-term debt of $1.69 billion, and cash and cash equivalents of $1.16 billion.

HF Sinclair reported second-quarter 2026 adjusted earnings of $5.31 per share, which topped the Zacks Consensus Estimate of $4.39 per share.

As of June 30, 2026, DINO had total debt of $2.77 billion, and cash and cash equivalents of $2.26 billion.

Cactus reported second-quarter 2026 adjusted earnings of 93 cents per share, which surpassed the Zacks Consensus Estimate of 71 cents per share.

As of June 30, 2026, WHD had cash and cash equivalents of $365 million.

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