ET Q2 Earnings Call Centers on Higher Outlook and Gas Growth

ET Raises Full-Year EBITDA Outlook

Group CFO Dylan Bramhall said segment outperformance drove the latest guidance increase. Energy Transfer now expects 2026 adjusted EBITDA of $18.8 billion to $19.1 billion, up from $18.2 billion to $18.6 billion.

Bramhall said the second-quarter increase reflected roughly $100 million of outperformance in each of Midstream, Intrastate and Crude, plus more than $200 million in NGL and refined products.

The partnership reported 59 cents per common unit, topping the Zacks Consensus Estimate of 39 cents. Revenues of $34.33 billion exceeded the Zacks Consensus Estimate of $31.09 billion.

Energy Transfer Treats Volatility as Upside

Bramhall said the revised plan assumes little continuation of the wider spreads and commodity volatility that benefited the first half. He told a Barclays analyst that the range remains achievable without another major volatility increase.

Bramhall expects base operations and volumes to remain strong in the second half. He added that continued market dislocations could support performance near the high end of the guided range.

Co-CEO Marshall McCrea emphasized that the asset network can redirect gas and liquids as domestic and international conditions change, allowing the partnership to capture optimization opportunities across multiple businesses.

ET Projects Shift Growth Toward 2027

Co-CEO Tom Long said Hugh Brinson is in commercial service and should be capable of flowing its full Phase I capacity of 1.5 Bcf per day by Sept. 1, 2026.

Bramhall said contract step-ups will build through year-end, with the larger contribution beginning in 2027. Mustang Draw II and Frac IX are also scheduled late in 2026, limiting their current-year impact.

McCrea told a JPMorgan analyst that Hugh Brinson Phase II remains targeted for the first quarter of 2027. The compression-led expansion could begin commissioning in late January or early February.

Energy Transfer Builds Around Gas Demand

McCrea stated that Desert Southwest is progressing ahead of management’s expectations on survey permissions, with pipe and compression already ordered. The project remains targeted for the latter part of 2029.

Liquids Business executive vice president Adam Arthur said that customer activity has not slowed despite concerns about permitting and turbine availability. Arthur noted that data center developers are expanding at sites where projects are already underway and communities are receptive.

McCrea told a Wolfe Research analyst that planned announcements include short laterals, at least one large intrastate pipeline and another interstate project. He added that the company expects more detail later in 2026.

ET Expands Its NGL Export Platform

Arthur said the Nederland expansion is timed to start in mid-2028 and ramp through mid-2029 as customers bring two new international ethane crackers online.

The project adds 240,000 barrels per day of ethane export capacity and 55,000 barrels per day of LPG capacity. All ethane capacity is committed under long-term agreements extending into the 2040s.

Energy Transfer also signed transportation and fractionation agreements covering about 300,000 barrels per day of Y-grade volumes into the 2030s. Arthur told a Goldman Sachs analyst that management expects future contracting rates to move higher.

Energy Transfer Maintains Capital Discipline

Long said the partnership has enough visibility to sustain growth capital spending of $5 billion or more annually through 2029. The 2026 plan is $5.6 billion to $5.9 billion.

Bramhall said management is not lowering return requirements and views the current opportunity set as strong enough to support higher thresholds. He added that the projects are primarily demand-driven and built for customer needs.

Co-CEO Long reiterated targets of 3% to 5% annual distribution growth and leverage of 4 to 4.5 times EBITDA, while prioritizing safe, on-time and on-budget project delivery.

ET's Zacks Signals Remain Balanced

ET carries a Zacks Rank #3 (Hold). The rating supports a more balanced near-term view than the top-ranked categories. Its Value Score, Momentum Score and VGM Score of A carry the highest grade within those measures, while the Growth Score of B occupies the middle tier.

Style Scores complement the Zacks Rank rather than replace it, with A or B grades emphasized most when paired with a Zacks Rank #1 (Strong Buy) or 2 (Buy). ET’s rank can change as analysts revise estimates after these results. You can see the complete list of today’s Zacks #1 Rank stocks here.

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