Western Midstream's Q4 performance falls short of expectations, stock price declines

2026-02-19 01:54:23

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Investing.com – Western Midstream Partners, LP (NYSE:WES) reported fourth-quarter earnings that fell significantly short of analyst expectations, with the stock dropping 2.4% after hours on Wednesday.

The midstream energy company posted a fourth-quarter earnings per share of $0.47, down 50% from the consensus estimate of $0.94. Revenue was $1.03 billion, slightly below the expected $1.04 billion. The company noted that its quarterly results included a $29.5 million unfavorable non-cash income adjustment related to service cost agreements.

Despite underperforming expectations, Western Midstream reported a record adjusted EBITDA of $635.6 million for the fourth quarter, and full-year adjusted EBITDA of $2.481 billion, exceeding its guidance range of $2.35 billion to $2.55 billion’s midpoint, representing a 6% year-over-year increase.

“2025 will be a successful and impactful year for WES,” said President and CEO Oscar K. Brown. “With steady throughput growth across all three products for a second consecutive year, including quarterly records in the Delaware Basin and DJ Basin, we achieved record adjusted EBITDA and free cash flow.”

The company announced a quarterly distribution of $0.910 per unit, unchanged from the previous quarter, and plans to increase the distribution to $0.93 per unit starting in the first quarter of 2026, a 2.2% increase.

Looking ahead, Western Midstream provided guidance for 2026, expecting adjusted EBITDA between $2.5 billion and $2.7 billion, with the midpoint up about 5% from 2025. The company also expects total capital expenditures between $850 million and $1 billion, significantly lower than the previous estimate of at least $1.1 billion.

Fourth-quarter natural gas throughput averaged 5.2 Bcf/d, down 4% quarter-over-quarter, while annual throughput increased 4% year-over-year. In the fourth quarter, the company completed its acquisition of Aris Water Solutions, creating one of the largest integrated produced water solutions providers in the Delaware Basin.

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