Plains All American 2025 Q3 Earnings Net Income Surges 69.6% Amid Revenue Decline

Plains All American (PAA) reported mixed Q3 2025 results, with a 7.0% year-over-year revenue decline but a 150% surge in EPS and 69.6% net income growth. The stock edged up in the latest trading session and week, though mixed analyst ratings and a 1.2% post-earnings dip highlight cautious investor sentiment.

Revenue

Plains All American’s total revenue fell to $11.58 billion in Q3 2025 from $12.46 billion in the prior year, driven by a 7.0% contraction in its core operations. The Crude Oil segment led with $11.56 billion in revenue, while NGL contributed $24 million. A $5 million intersegment adjustment offset minor internal variances, reflecting operational complexity in its midstream infrastructure.

Earnings/Net Income

The company’s profitability surged, with EPS rising 150% to $0.55 and net income increasing 69.6% to $529 million. These gains underscore improved cost management and strategic focus on high-margin crude oil assets, despite weaker revenue trends. The EPS performance exceeded 2024’s $0.22, signaling strong operational leverage.

Price Action

The stock price of Plains All American rose 1.65% in the latest trading day, 1.09% in the past week, and 1.16% month-to-date. A backtest of the strategy to buy PAA when revenues beat estimates and hold for 30 days showed an average gain of 5.2% per transaction, with a maximum drawdown of 12.3%. This suggests potential for capitalizing on positive earnings surprises, though volatility remains a risk.

Post-Earnings Price Action Review

The strategy of buying PAA when revenues beat estimates and holding for 30 days has shown favorable performance. The backtest data reveals an average gain of 5.2% per transaction, with a maximum drawdown of 12.3%. This indicates the strategy's ability to capitalize on positive earnings surprises, although it's not immune to market volatility.

CEO Commentary

CEO Willie Chang highlighted the company’s Q3 2025 performance, emphasizing a $669 million adjusted EBITDA and progress in lowering leverage. He noted the acquisition of the remaining 45% of Epic Crude Holdings, which is expected to deliver mid-teens unlevered returns. “Our focus on capital discipline and optimizing cash flow has strengthened our portfolio,” Chang stated, adding that the NGL divestiture will further align the company with stable crude oil cash flows.

Guidance

Management reiterated plans to increase distributions by $0.15 until reaching targeted coverage, with the NGL sale expected to close early next year. CFO Al Swanson emphasized long-term returns to unit holders, stating the Epic acquisition will be “significantly DCF accretive over time.” The company acknowledged temporary leverage challenges but expressed confidence in 2026 growth driven by Permian basin operations and strategic acquisitions.

Additional News

Plains All American announced the acquisition of the remaining 45% stake in Epic Crude Holdings, expected to boost unlevered returns and synergy capture. The pending sale of NGL assets, set to close early 2026, will refocus the portfolio on crude oil. Additionally, the company declared a $0.38 quarterly dividend, yielding 9.4% annually, despite a payout ratio of 172.73%. Analysts remain divided, with UBS and Morgan Stanley maintaining “buy” ratings, while others caution on near-term volatility due to Permian market fluctuations.

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