Plains All American Pipeline, L.P.
), a publicly traded master limited partnership, is scheduled to
report its second-quarter 2012 financial results after the market
closes on August 6, 2012.
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Plains All American Pipeline reported its first-quarter 2012
operating earnings of $1.58 per unit, up from $1.03 per unit in the
year-ago quarter. The robust earnings performance was attributable
to favorable growth executed by each segments of the partnership.
Quarterly result was ahead of the Zacks Consensus Estimate of $1.40
On a GAAP basis, the partnership's earnings were $1.02 per unit
compared with 90 cents per unit in the prior-year quarter. The
variance of 56 cents between operating and GAAP earnings was due to
certain one-time items. This includes a $59 million loss on
derivative activities, $26 million related to equity compensation
expenses, an expense of $4 million for acquisitions related
expenses and $1 million for certain other items.
Overall revenue at Plains All American Pipeline at the end of the
first quarter was $9.2 billion compared with $7.6 billion in the
year-ago period, reflecting growth of 21.0%. This was driven by
higher average volumes from Transportation and Facilities, which
constituted combined growth of 23.5%. Reported revenue surpassed
the Zacks Consensus Estimate of $8.2 billion.
Guidance for 2012
Plains All American Pipeline made an upward revision to its organic
capital growth program by $150 million to $1 billion. The
partnership has also increased the mid-point of its annual adjusted
earnings before interest, taxes, depreciation and amortization
("EBITDA") estimate by $150 million on the back of a significant
performance in the first quarter of 2012.
The Zacks Consensus Estimate for second-quarter 2012 is $1.63 per
unit, higher than $1.12 reported in the prior-year quarter.
Currently, the Zacks Consensus Estimate for the partnership's
earnings ranges between $1.58 and $1.68 a unit.
For full-year 2012, the Zacks Consensus Estimate stands at $4.98
per unit, lower than its full-year 2011 earnings of $5.24 per unit.
The current Zacks Consensus Estimate for full-year 2012 ranges
between $4.74 and $5.22 per unit.
Estimate Revisions Trend
We have observed no estimate revisions at this point. Estimate for
the second quarter remained unchanged in the last 7 days period.
For full-year 2012, out of 2 estimates, there were no estimate
revisions in the last 7 days.
Some analysts believe that Plains All American Pipeline's
continuous strategic acquisitions and infrastructure expansion,
steady cash distribution hike and strong financial condition may be
key factors for its near-term future growth.
In the last 7 days, the Zacks Consensus Estimate for second-quarter
earnings remained unchanged.
For full-year 2012, the Zacks Consensus Estimate remained unchanged
in the last 7 days.
With respect to earnings surprises, Plains All American Pipeline,
L.P. has topped the Zacks Consensus Estimate in the last four
quarters in the range of 2.48% to 41.77%. The average surprise over
the last four quarters is 20.69%.
Plains All American Pipeline continues to boost its operations,
both internally and through strategic acquisitions. Under its
organic growth program, the partnership constructed and expanded
its pipeline systems, crude oil storage, and terminal and natural
gas storage facilities. As a part of its acquisition-oriented
growth strategy, the partnership recently acquired
) Canadian assets.
We view Plains All American Pipeline as an organization with strong
crude oil pipelines and storage assets portfolio in
well-established oil producing regions. Moreover, the partnership's
strategic position enables it to serve major U.S. refinery and
distribution markets in a better way. Overall, we believe the
partnership's positional advantage will fuel its future
Currently, we are maintaining a long-term Outperform recommendation
on Plains All American Pipeline, L.P. The partnership retains a
Zacks #1 Rank, which translates into a short-term Strong Buy
Houston, Texas-based Plains All American Pipeline, L.P. owns assets
strategically located in well-established oil producing regions,
catering to major U.S. refinery and distribution markets. Other
than organic growth opportunities, the partnership also relies on
acquisitions to spur growth.