Buckeye Partners L.P.
) clocked operating earnings of 87 cents per unit in the third
quarter of 2012 beating the Zacks Consensus Estimate of 73 cents
per unit. Earnings were also higher than the year-ago figure of
Earnings in the third quarter 2012 outperformed on account of
Buckeye's favorable business conditions and effective execution
of its growth plans. In addition, expansion in pipeline and
terminal units including the Perth Amboy facility contributed to
the bottom-line increase.
Total revenue at the end of the third quarter 2012 slid 13.5%
to approximately $966.0 million from $1,116.9 million in the
prior-year quarter. Reported revenue widely missed the Zacks
Consensus Estimate of $1,149 million.
Lower Energy Service sales during the third quarter resulted
in the overall decline in the partnership's top-line.
The top-line shortfall was mainly attributed to a sharp 23%
decline in revenue at Energy Services in tandem with a 10% fall
in revenues at the Development and Logistics business. However, a
20% increase in Pipelines & Terminals revenue partially
offset the decline.
During the quarter, total costs and expenses decreased 29%
year over year to $852.6 million from $1,194.2 million in the
prior-year period. A 20.8% fall in cost of product sales and
natural gas storage was responsible for the overall decline.
The partnership's adjusted EBITDA increased substantially by
20.6% to $152.6 million from $126.5 million in the third quarter
Interest and debt expenses declined to $28.7 million from
$33.2 million reported in the year-ago quarter.
Total cash and cash equivalents as of September 30, 2012, were
close to $3.0 million versus approximately $13.0 million as of
December 31, 2011.
Buckeye's long-term debt as of September 30, 2012, was $2.7
billion compared with $2.4 billion of long-term debt as of
December 31, 2011.
Buckeye's capital spending during the quarter stood at $85.0
million, compared with $90.9 million in the prior-year
The partnership declared a cash distribution of $1.0375 per
unit payable on November 30, 2012 to unit holders of record on
November 12, 2012. This distribution also represents a 1.2%
year-over-year increase from $1.025 per unit announced in the
third quarter 2011.
The partnership's large-scale Bahamas Oil Refining
Company International Limited (BORCO) facility came online on
July 1, 2012 and have supplemented the company's earnings in the
third quarter 2012. Buckeye's Perth Amboy unit purchased in
late July 2012 also added to the partnership's
One of its close peers,
The Williams Companies, Inc.
) reported dull third quarter 2012 results due to lower natural
gas liquids margin and higher cost associated with
Operating earnings came in at 25 cents per share, trailing the
Zacks Consensus Estimate of 27 cents and plummeting 16.7% year
over year from 30 cents.
The company generated revenues of $1,752 million, less than
our estimate of $2,081 million and also diminishing 11.2% year
Buckeye's execution success in its growth-related programs
will certainly strengthen the partnership's position in the U.S.
market. We believe the high-quality BORCO facility will
accentuate its International operations. Domestically, its Perth
Amboy terminal will also continue to contribute positively to
However, unplanned outages and exposure to fuel as well as
diesel price sensitivities could negatively influence the
partnership's short-term top-line growth. Buckeye Partners
presently has a short-term Zacks #3 Rank (Hold rating)
Based in Houston, Texas, Buckeye Partners L.P. is a publicly
traded partnership that owns and operates one of the largest
independent refined petroleum products pipeline systems in the
United States in terms of volumes delivered.
BUCKEYE PARTNRS (BPL): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
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