Western Midstream Partners, LP (NYSE: WES) reported fourth‑quarter 2025 results that fell short of analyst expectations, with net income attributable to limited partners of $187.2 million ($0.47 per common unit) and total revenue of $1.03 billion—below the consensus range of $1.06 billion to $1.11 billion. Adjusted EBITDA reached $635.6 million, a record for the partnership, and free cash flow after distributions was $340.8 million, supporting a quarterly distribution of $0.910 per unit (annualized $3.64).
The earnings miss was driven largely by a $29.5 million non‑cash revenue adjustment related to cost‑of‑service agreements, which reduced reported revenue and compressed margins. In addition, higher operating costs and a challenging commodity‑price environment eroded profitability, causing the EPS to decline to $0.47 from the consensus estimate of $0.91 (or $0.98 in some reports). The company’s management noted that the non‑cash adjustment and margin pressure were the primary reasons for the shortfall.
Despite the miss, throughput remained strong. The partnership recorded record volumes in natural gas, crude oil, NGLs, and produced water, with produced‑water throughput increasing 121% sequentially. Capital expenditures for the quarter totaled $231.0 million, and the partnership’s cash‑generating ability was underscored by the $340.8 million free cash flow, which enabled the distribution increase to $0.910 per unit.
Management reiterated its 2026 outlook, maintaining a mid‑single‑digit growth target for adjusted EBITDA and a 2.2% increase in the distribution. The company highlighted the continued integration of the Aris Water acquisition, with 85% of the targeted $40 million annual run‑rate benefit expected by the end of Q1 2026, and progress on the Pathfinder pipeline and North Loving II projects, both on schedule and positioned to support future throughput expansion in the Delaware Basin.
"The consistency of our assets and the discipline of our teams were evident throughout the year," said President and CEO Oscar K. Brown. "We also moved key strategic projects forward. We sanctioned and began constructing Pathfinder, backed by long‑term agreements, brought the North Loving I natural‑gas processing train online ahead of schedule and under budget, and sanctioned North Loving II to meet growing natural‑gas processing demand."
"We noted the company's outlook for 2026, reflecting the contribution of the Aris acquisition and a more challenging commodity price environment. We highlighted expected throughput growth in the Delaware Basin and further cost efficiencies," added Senior Vice President and CFO Kristen Shults.
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