What happened

Shares of Equitrans Midstream (ETRN 3.62%) leaped more than 10% by 2:30 p.m. ET on Tuesday. Fueling the pipeline stock's surge was its second-quarter report. 

So what

Equitrans Midstream reported strong Q2 results. The natural gas pipeline company produced $183.5 million of free cash flow, $118.6 million of which it retained after paying its dividend. That gave it funds to invest in capital projects and repay debt, and has the company closer to achieving its long-term leverage target of 4.0 times. 

The pipeline company's strong showing enabled it to increase its 2022 financial guidance. It now expects to generate $300 million to $370 million of free cash flow, $40 million to $110 million of which it will retain. Meanwhile, it sees capital spending in the range of $540 million to $620 million. Equitrans also secured a new expansion project. It expects to invest $70 million in the 2023 to 2024 time frame to install new compression to support a customer.

Equitrans also recently received some excellent news regarding its largest project, the long-delayed Mountain Valley Pipeline (MVP). West Virginia Senator Joe Manchin secured a commitment to allow the pipeline to move forward as part of a recent budget deal. Because of that, Equitrans now expects to finish the $6.6 billion pipeline in the second half of next year. That project -- along with others underway -- will add $315 million of annual earnings when they come online, providing a big boost to Equitrans' bottom line.

Now what

Equitrans Midstream continues to make progress on its strategic and financial plan. With MVP now moving forward, the company has more visibility into its future growth prospects and the ability to achieve its leverage target. That could enable it to start increasing its high-yielding dividend in the future.