Hess Midstream LP Reports Q2 EPS of 74c, Revenue of $414.2M, Expects Volume Growth Across All Systems

Hess Midstream LP reported Q2 EPS of 74 cents, beating the consensus estimate of 73 cents. Revenue for the quarter was $414.2M, also exceeding the consensus estimate of $405.13M. The company's president and COO, John Gatling, attributed the strong results to upstream performance and high system availability. Hess Midstream expects sustained excess adjusted free cash flow generation and continued return of capital to shareholders.

Hess Midstream Partners LP (HESM) delivered robust financial performance in the second quarter of 2025, with earnings per share (EPS) of $0.74, surpassing analyst forecasts of $0.66. The company's revenue also exceeded expectations, reaching $414.2 million against the anticipated $405.13 million. The stock saw a premarket increase of 4.35%, climbing to $42.74, reflecting investor confidence in the company’s performance and outlook [1].

Key Takeaways:
- Hess Midstream’s Q2 2025 EPS beat forecasts by 12.12%.
- Revenue surpassed expectations with a 2.24% surprise.
- Stock price increased by 4.35% in premarket trading.
- Record operating performance with increased throughput volumes.
- Positive forward guidance with projected growth in 2025.

Company Performance:
Hess Midstream demonstrated strong financial and operational performance in Q2 2025. The company reported a net income of $180 million, up from $161 million in the previous quarter. Adjusted EBITDA rose to $316 million from $292 million, with a gross adjusted EBITDA margin of 80%, exceeding the target of 75%. The company also achieved record throughput volumes across its segments, indicating robust operational efficiency. InvestingPro analysis reveals a solid 8.8% year-over-year revenue growth and an impressive 76.7% gross profit margin [1].

Market Reaction:
The stock price of Hess Midstream increased by 4.35% in premarket trading, reaching $42.74. This movement suggests a positive investor response to the company’s earnings and revenue beats. The stock is approaching its 52-week high of $44.05, reflecting strong market confidence. InvestingPro data shows the stock has demonstrated low price volatility with a beta of 0.58, while delivering a solid 17.8% total return over the past year. The stock is currently trading near its Fair Value, based on InvestingPro’s proprietary valuation model [1].

Outlook & Guidance:
Looking ahead, Hess Midstream is targeting 10% volume growth across its oil and gas systems in 2025, along with an estimated 11% growth in adjusted EBITDA. The company plans to maintain a 5% annual distribution growth through 2027 and expects adjusted free cash flow between $725 million and $775 million. Capital expenditures for the year are projected to be around $300 million [1].

Executive Commentary:
CEO Jonathan Stein stated, "We continue to deliver outstanding operational performance," highlighting the company’s achievements in the quarter. President and COO John Gatling added, "We’re expecting oil to remain flattish with gas growing over the longer term," emphasizing the company’s strategic focus on gas growth [1].

Risks and Challenges:
The $300 million capital expenditure plan could affect short-term cash flow. The revolving credit facility balance of $273 million indicates financial leverage. Flat oil volume projections could be a concern if gas growth does not meet expectations [1].

References:
[1] https://uk.investing.com/news/transcripts/earnings-call-transcript-hess-midstream-q2-2025-shows-strong-earnings-beat-93CH-4192335