Buckeye Partners L.P.
) announced fourth quarter operating earnings of 96 cents per
unit, outpacing the Zacks Consensus Estimate by 15 cents. The
earnings of the partnership also surpassed the year-ago earnings
of 64 cents per unit.
The earnings beat stemmed from favorable performances from the
partnership's Bahamas Oil Refinery Company International Limited
("BORCO") program and benefits accrued from the initiation of
crude oil operations at the Albany terminal unit.
In 2012, adjusted earnings were $2.93 per unit compared with
the year-ago figure of $3.06. The results were in line with the
Zacks Consensus Estimate.
Buckeye Partners recorded GAAP earnings for fourth quarter
2012 of 35 cents per unit compared with 64 cents per unit in the
year-ago period. The difference of 61 cents per unit between
operating and GAAP earnings, during the quarter, was due to a
non-cash impairment charge associated with the termination of the
NORCO Pipeline business.
For 2012, GAAP earnings stood at $2.32 per unit versus $1.20
per unit in 2011.
Total revenue at the end of the fourth quarter was $1.14
billion versus $1.31 billion in the year-ago quarter, reflecting
a decline of 12.5%. Revenue during the quarter widely missed the
Zacks Consensus Estimate by $128.8 million.
Revenue in 2012 was $4.3 billion, down 8.5% year over year.
The figure was also below the Zacks Consensus Estimate of $4.9
Uninspiring sales at the Energy Services segment mainly led to
the drop in the fourth quarter top line. Revenue from Energy
Services plunged 23.6% year over year to $824.2 million from
$1,078.9 million. This was partially offset by positive
contributions from the pipeline, natural gas storage and overseas
During the quarter total costs and expenses declined 11.3%
year over year owing to a 19.4% drop in cost of product sales and
natural gas storage services partially tempered by a 14.6% year
over year increase in general and administrative expenses.
The partnership's adjusted EBITDA was $172.0 million for the
fourth quarter of 2012 compared with $121.5 million in the
prior-year period, up 41.5%, driven by improved returns due to
normal winter conditions which included higher contribution from
butane blending which aided both the Terminals and Energy
Services divisions as well as gains amassed from short-term
spreads by the hub services.
Operating income for the quarter decreased 28.7% year over
year to $62.4 million from $87.7 million in the year-ago quarter.
The decline in costs failed to mitigate the effect of a lower top
line resulting in margin contraction.
Interest and debt expenses at the end of fourth quarter 2012
were $29.8 million, marginally higher than $29.3 million reported
in the year-ago quarter.
Total cash and cash equivalents as of Dec 31, 2012, were $6.8
million versus $13.0 million as of Dec 31, 2011.
Buckeye's long-term debt as of Dec 31, 2012, was $2.7 billion
compared with $2.4 billion as of Dec 31, 2011.
Buckeye's capital outlay for 2012 was $331.3 million compared
with $305.3 million in the prior-year.
The partnership remained true to its distribution rate of
$1.0375 per unit payable on Feb 28, 2013, to unit holders of
record on Feb 19, 2013.
Other Pipeline Partnership Releases
Plains All American Pipeline, L.P.
) reported adjusted earnings of 98 cents per unit for the fourth
quarter 2012 beating the Zacks Consensus Estimate of 69
El Paso Pipeline Partners
) reported earnings of 63 cents per unit in the fourth quarter,
surpassing the Zacks Consensus Estimate of 55 cents.
Although Buckeye Partners' earnings surprise does not present
a healthy track record, we anticipate its increasing presence in
the markets of Midwest, covering upper Illinois, Indiana, Ohio
and Pennsylvania will serve as a major growth driver in the near
The partnership's earnings will continue to feed well on the
back of its high-return projects like the BORCO facility and
Perth Amboy terminals, Yabucoa in the Caribbean and the recently
concluded Opelousas Louisiana Terminal.
Buckeye Partners carries a Zacks Rank #3 (Hold). We prefer the
Zacks Ranked #2 (Buy) pipeline operator
Atlas Pipeline Partners, L.P.
) which is slated to release its fourth quarter 2012 financial
results on Feb 18, 2013.
Based in Houston TX, Buckeye Partners, L.P. owns and operates
refined petroleum products pipeline systems in the United
ATLAS PIPLN PTR (APL): Free Stock Analysis
BUCKEYE PARTNRS (BPL): Free Stock Analysis
EL PASO PIPELIN (EPB): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
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