Buckeye Partners L.P.
) second quarter 2013 operating earnings shot up 30.9% year over
year to 72 cents per unit. Earnings however trailed the Zacks
Consensus Estimate of 79 cents per unit by 8.9%.
The robust results reflect the partnership's strong pipeline
and terminal performance as well as healthy returns from its
investments in International Operations.
Buckeye Partners total revenue at the end of the quarter was
$1,005.4 million versus $982.6 million in the prior-year quarter,
representing a surge of 2.3%. Quarterly revenue nevertheless fell
behind the Zacks Consensus Estimate by 14.3%.
Top-line growth continued to be modest and was largely
attributed to surge in contribution from the pipeline and
international storage businesses partially offset by low returns
from the Energy Service and Natural Gas Storage divisions.
Pipeline and Terminal
operations increased 13.9% year over year to $190.6 million in
the second quarter. The segment witnessed spiraling throughput
volumes in the second quarter driven majorly by gasoline and
were the biggest winner posting revenue of $144.4 million, up a
whopping 186.3% from the corresponding year-ago quarter. This was
mainly due to the successful execution of the Bahamas Oil
Refinery Company International Limited (BORCO) program.
Development & Logistics
revenue increased 4.2% year over year to $13.7 million in the
However, the upswing was partially offset by a 12.9% and 28.4%
respective decline in Buckeye Partners'
Natural Gas Storage
In the second quarter, total costs and expenses decreased
marginally to $899.7 million from $900.5 million in the year-ago
period. This was due to a 1.3% drop in cost of product sales and
Buckeye Partners' adjusted Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA) moved up 23.9% year over
year to $148.5 million.
Interest and debt expenses during the quarter were $30.2
million versus $27.6 million reported in the year-ago
Total cash and cash equivalents as of Jun 30, 2013, were $4.9
million versus $6.8 million as of Dec 31, 2012.
Buckeye Partners' long-term debt as of Jun 30, 2013, was $2.6
billion compared with $2.7 billion as of Dec 31, 2012.
The partnership spent $80.6 million on capital expenditure
during the quarter compared with $73.7 million in the prior-year
Buckeye Partners' current distribution rate at the end of Jun
30, 2013, stands at $1.0625 per unit, which reflects a 2.4%
increase from the second quarter 2012 cash distribution of
$1.0375 per unit. The distribution will be payable on Aug 20,
2013, to unit holders of record on Aug 12, 2013.
Other Oil and Gas Pipeline Operators
Magellan Midstream Partners LP
) reported second quarter earnings of 65 cents per unit, beating
the Zacks Consensus Estimate of 53 cents.
El Paso Pipeline Partners
) posted second quarter earnings of 43 cents per unit, falling
behind the Zacks Consensus Estimate by 8.5%.
TC PipeLines LP
) registered second quarter 2013 earnings of 40 cents per unit,
lagging the Zacks Consensus Estimate by 23.1%.
Although Buckeye Partners missed our top- and bottom-line
expectations, the favorable year-over-year comparisons are
commendable. Key future drivers include the tariff rate increase
of 7% effective from May 1, 2013 and speedy execution of the
On the domestic front, progress of the Perth Amboy terminal
and addition of long-term contracts for support of crude oil
storage expansion and rail transport in the Chicago complex will
augment opportunities for Buckeye Partners.
Nonetheless, weak Energy Service and Natural Gas Storage
businesses might continue to pose challenges for Buckeye Partners
in the upcoming quarters. Buckeye Partners presently retains a
Zacks Rank #3 (Hold).
BUCKEYE PARTNRS (BPL): Free Stock Analysis
EL PASO PIPELIN (EPB): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
TC PIPELINES (TCP): Free Stock Analysis
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