It has been about a month since the last earnings report for Antero Midstream Corporation (AM). Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Antero Midstream due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Antero Midstream Q1 Earnings Miss Estimates, Revenues Increase Y/Y
first-quarter 2026 earnings per share of 25 cents, missing the Zacks Consensus Estimate of 26 cents by 3.9%. Earnings were in line with the year-ago quarter’s level of 25 cents.
Total quarterly revenues of $314.21 million beat the Zacks Consensus Estimate of $300.07 million by 4.7%. The top line also improved 7.9% from $291.13 million in the year-ago quarter. Full capacity utilization in processing and fractionation underscored robust demand despite inflationary cost pressures.
The lower-than-expected quarterly earnings can be attributed to an increase in total operating expenses. However, higher gathering and compression volumes partially offset the negatives.
AM's Revenue Mix Improved on Gathering Strength
Gathering and centralized compression revenues rose to $262.00 million from $238.02 million a year ago, driven by higher throughput. Total average daily gathering volumes increased 14% year over year to 3,805 million cubic feet (MMcf/d) from 3,348 MMcf/d, reflecting continued activity on AM’s dedicated acreage. The reported figure was above our estimate of 3,361 MMcf/d. On a per-Mcf basis, the average gathering fee increased 3% from 36 cents a year ago to 37 cents.
High-pressure gathering volumes totaled 3,133 MMcf/d, up 1% from the year-ago level of 3,106 MMcf/d. Our estimate for the same was 3,185 MMcf/d. On a per-Mcf basis, the average high-pressure gathering fee was 23 cents, which remained flat year over year. The reported figure met our estimate of 23 cents.
Centralized compression volumes averaged 3,370 MMcf/d compared with 3,330 MMcf/d a year ago. The figure was below our estimate of 3,400 MMcf/d. On a per-Mcf basis, the average centralized compression fee was 23 cents, which remained flat year over year. The reported figure met our estimate of 23 cents.
Antero Midstream's Water Handling Mix Shifted Sharply
Fresh water delivery volumes averaged 83 MBbl/d, down 21% from 105 MBbl/d in the prior-year quarter, pointing to a different cadence of completion activity on the legacy system. The figure was below our estimate of 106 MBbl/d. On a per-barrel basis, the average realized fresh water delivery fee was $4.44 compared with $4.38 a year ago, reflecting annual CPI-based adjustments embedded in the contracts. The figure was above our estimate of $4.39.
Other water handling volumes jumped to 93 MBbl/d from 58 MBbl/d, a 60% increase year over year. This category includes services on acreage acquired from HG Production as well as other fluid-handling work charged under cost-plus arrangements, helping explain the sharp shift in the water mix during the quarter. The figure was above our estimate of 61 MBbl/d.
AM's Operating Expenses Rose as the Quarter Stayed Busy
Total operating expenses increased to $125.60 million from $113.91 million in the prior-year quarter. Direct operating expenses climbed to $70.70 million from $56.83 million a year ago.
Below the operating line, interest expense, net, increased to $54.03 million from $48.41 million in the year-ago quarter, which management tied to financing associated with the HG Energy acquisition. The quarter also included $8.69 million of transaction expenses related to the HG Midstream acquisition, contributing to the earnings shortfall versus the Zacks estimate despite the revenue beat.
Antero Midstream's Cash Flow Covered Dividends & Buybacks
Operating cash flow increased in the first quarter of 2026 with net cash provided by operating activities of $238.62 million compared with $198.94 million in the year-ago quarter. On a non-GAAP basis, adjusted free cash flow after dividends was $85.28 million, up from $79.06 million a year ago.
AM reported capital expenditures of $42 million during the quarter, including $26 million for gathering and compression and $15 million for water infrastructure. The company also repurchased 1.0 million shares for $18 million and ended the quarter with about $318 million of remaining capacity under its repurchase authorization, keeping capital return in focus alongside growth investments.
Balance Sheet of AM
As of March 31, 2026, the company had a long-term debt of $3.67 billion with no cash and cash equivalent in hand.
AM Targets Integration Milestones and New Demand Projects
Management highlighted that the newly acquired assets were integrated during Winter Storm Fern with no service interruptions. Commissioning of the dry gas compression expansion is complete and integration of the water systems is underway, with full completion expected by year-end.
Looking ahead, the company is capitalizing on local power and data center opportunities to drive future growth. Work has already begun on the HG assets integration, focusing specifically on water systems. Management expects to deliver high single-digit EBITDA growth in the coming days, driven by enhanced connectivity and active development across rich gas, dry gas and blended areas.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Antero Midstream has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Antero Midstream has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Antero Midstream Corporation (AM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).