Targa Resources beats profit estimates on record Permian volumes, boosts dividend

Nov 5 (Reuters) - Pipeline operator Targa Resources TRGP.N beat estimates for third-quarter adjusted core profit on Wednesday, boosted by record natural gas and liquids volumes from the Permian basin.

Its shares rose 1.3% in premarket trading, as the company also announced plans to raise its annual dividend by 25% to $5 per share in 2026.

U.S. midstream companies such as Targa and peer Kinder Morgan KMI.N are benefiting from a surge in oil and gas production in the Permian basin, as well as rising natgas demand from LNG export facilities and increased power generation tied to AI operations, cryptocurrency mining and data centers.

Targa said it expects full-year adjusted core profit around the top end of its $4.65 billion to $4.85 billion range.

Its quarterly Permian natural gas inlet volumes rose about 11% to 6.62 billion cubic feet per day (cfpd) from a year earlier, while natgas liquids pipeline transportation volumes surged about 23% to 1,017 thousand barrels per day.

The company also announced the construction of a 275 million cfpd natural gas processing plant in the Permian Delaware in New Mexico, expected to begin operations in the first quarter of 2027.

Targa has been pushing to expand its infrastructure footprint with new projects aimed at keeping pace with record output from the Permian basin.

The Houston, Texas-based company reported an adjusted core profit of $1.27 billion for the quarter ended September 30, compared with estimates of $1.21 billion, according to data compiled by LSEG.