ET Q2 Earnings Call Centers on Higher Outlook and Gas Growth

• Q2 segment outperformance included roughly $100 million above expectations in each of Midstream, Intrastate and Crude, plus over $200 million in NGL and refined products
• Hugh Brinson Phase I is targeting full 1.5 Bcf/day capacity by September 2026, with Phase II scheduled for Q1 2027; Nederland expansion adds 240,000 bpd ethane export capacity starting mid-2028
• Management views market volatility as potential upside rather than a requirement for guidance, stating base operations alone can meet the raised outlook while maintaining 3-5% annual distribution growth targets

Summary: Energy Transfer Q2 2026 Earnings Call Highlights

Key Financial Metrics:

Energy Transfer LP (ET) raised its full-year 2026 adjusted EBITDA guidance to $18.8-$19.1 billion, up from $18.2-$18.6 billion. The partnership reported Q2 earnings of 59 cents per common unit, beating the Zacks Consensus Estimate of 39 cents. Revenues reached $34.33 billion, exceeding consensus estimates of $31.09 billion.

Segment Performance:

The guidance increase was driven by approximately $100 million in outperformance across Midstream, Intrastate, and Crude segments, with over $200 million in NGL and refined products. Management indicated that base operations alone can meet guidance targets, while continued market volatility could push results toward the high end of the range.

Major Projects and Timeline:

• Hugh Brinson Phase I expected to reach full 1.5 Bcf/day capacity by September 1, 2026, with Phase II targeted for Q1 2027
• Mustang Draw II and Frac IX scheduled for late 2026
• Nederland expansion planned for mid-2028 start, adding 240,000 bpd ethane and 55,000 bpd LPG export capacity
• Desert Southwest project targeting late 2029 completion

Capital Strategy:

Energy Transfer maintains annual growth capital spending of $5-$5.9 billion through 2029, with 2026 spending projected at $5.6-$5.9 billion. The company reaffirmed its 3-5% annual distribution growth target and leverage ratio of 4-4.5 times EBITDA.

Market Implications:

Strong demand from power generation, data centers, and industrial customers is driving project development, with management emphasizing demand-driven growth and disciplined capital allocation. ET holds a Zacks Rank #3 (Hold).