Energy Transfer Partners L.P.
) announced dull second quarter 2012 results, owing to
deteriorating natural gas market conditions, reduced gross margin
at Intrastate Transportation and Storage segment and higher
operating expense at most of the business segments.
ENERGY TRAN PTR (ETP): Free Stock Analysis
SUNOCO INC (SUN): Free Stock Analysis Report
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The owner of the biggest intrastate pipeline system in Texas broke
even on a limited partner basis, against 19 cents earned in the
prior-year quarter. The results were way below our earnings
estimate of 36 cents.
Quarterly revenues of $1,240.3 million missed our projection of
$1,469.0 million. Comparing year over year, sales decreased 23.8%
from $1,628.1 million, also due to low natural gas sales.
Quarterly Cash Distribution
Last month, Energy Transfer announced second quarter distribution
of 89.375 cents per unit ($3.575 per unit annualized), which
remains unchanged from the year-earlier as well as previous quarter
distributions. The distribution will be paid on August 14, to
unitholders of record on August 6, 2012.
EBITDA & Operating Income
Adjusted EBITDA for the quarter was $466.4 million, compared with
$388.1 million in the year-ago quarter, reflecting robust
performances from Interstate Transportation and NGL (natural gas
liquids) Transportation and Services business units.
However, operating income of $289.4 million surged 7.0% from the
second quarter of 2011.
Distributable Cash Flow
Energy Transfer Partners reported distributable cash flows of
$275.3 million in the quarter, up from $223.3 million in the
During the quarter, maintenance capital expenditure totaled $30.4
million, up 3.1% year over year.
As of June 30, 2012, Energy Transfer had long-term debt (less
current maturities) of $9,043.4 million. Debt-to-capitalization
ratio was 55.2%.
In late May, Energy Transfer Partners entered into an agreement to
acquire Philadelphia-based refining and petroleum product marketing
) for $5.3 billion.
As per the terms of the agreement, Sunoco shareholders will get
$50.13 in cash or stock for each share they hold. The deal has been
approved by the board of directors of both the companies and is
expected to close by the latter half of 2012.
Energy Transfer Partners currently retains a Zacks #3 Rank
(short-term Hold rating). We maintain our long-term Neutral
recommendation on the partnership.