On Apr 17, Zacks Investment Research downgraded Texas-based
Enbridge Energy Partners LP ( EEP ) to a Zacks Rank
#5 (Strong Sell).DELEK LOGISTICS (DKL): Free Stock Analysis
ReportENBRIDGE EGY PT (EEP): Free Stock Analysis
ReportNUSTAR ENERGY (NS): Free Stock Analysis ReportSUMMIT MIDSTRM (SMLP): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment
Why the Downgrade?
Enbridge Energy witnessed sharp downward estimate revisions after
reporting disappointing fourth-quarter 2012 results. In fact, this
leading master limited partnership delivered negative earnings
surprises in 3 of the last 4 quarters with an average miss of
On Feb 13, 2013, Enbridge Energy reported weak fourth-quarter 2012
results, reflecting lower natural gas liquids price realization.
The partnership reported fourth-quarter 2012 adjusted earnings of
18 cents per unit, missing the Zacks Consensus Estimate of 26
cents. The quarterly figure also deteriorated 43.8% from the
year-earlier profit of 32 cents.
With regard to business units, the Liquids segment's operating
income plunged 17.6% to $133.0 million in the quarter from the
year-earlier level of $161.5 million. The Natural Gas segment's
operating income decreased 16.5% year over year to $42.9 million in
the fourth quarter, due to lower revenues from lower natural gas
and natural gas liquids prices. Additionally, the Marketing segment
registered an operating loss of $1.4 million versus an operating
loss of $1.2 million in the prior-year quarter.
Notably, Enbridge Energy's distribution growth prospects are
closely linked to the successful completion of organic growth
projects, which in turn might be adversely affected by operational
hindrance, cost inflations and overruns, as well as delays in
A combination of all these factors has weighed on the earnings
estimates for Enbridge Energy in the last 60 days. The Zacks
Consensus Estimate for the first quarter of 2013 has gone down by
30.77% to 18 cents per unit while for 2013, the estimate dropped
18.18% to 99 cents per unit.
Enbridge Energy is expected to announce its first-quarter 2013
results on May 1. The Zacks Consensus Estimate for the
to-be-reported quarter is a profit of 18 cents per unit on revenues
of $1,745.0 million.
Other Stocks to Consider
Not all MLPs in the energy sector are performing as poorly as
Enbridge Energy. The stocks of Delek Logistics Partners
LP ( DKL ),
NuStar Energy LP ( NS ) and Summit
Midstream Partners LP ( SMLP ) are worth
considering. All these stocks carry a Zacks Rank #2 (Buy).