Magellan Midstream Partners LP
) announced better-than-expected second-quarter 2013 earnings, on
the back of strong activities from transportation and terminal
The Tulsa, Oklahoma-based oil distributor reported earnings per
unit (EPU) of 65 cents (excluding mark-to-market
commodity-related pricing adjustments), surpassing the Zacks
Consensus Estimate of 53 cents and the prior-year quarter
adjusted profit of 51 cents.
Total revenue of $443.9 million was down slightly (by 1.3%) year
over year and also fell short of the Zacks Consensus Estimate of
$452.0 million. Substantial fall in revenue from product sales
hurt the results.
In mid-Oct 2012, Magellan Midstream completed the split of its
limited partner units in the 2:1 ratio. The quarterly results
reflect the effects of the stock split.
Quarterly Distribution & Distributable cash
Magellan Midstream informed that distributable cash flow during
this reported quarter increased by 26% to $168.2 million as
compared to the year ago period.
Recently, Magellan Midstream raised its second-quarter 2013 cash
distribution by 5% sequentially and 13% year over year to 53.25
cents per unit ($2.13 per unit annualized). Magellan Midstream's
new distribution is payable on Aug 14 to unitholders of record as
on Aug 7, 2013.
Refined Products: In this segment, quarterly operating profits
(before affiliate G&A and D&A expenses) were recorded at
$177.8 million, slightly higher than that of the year ago period.
The 3.3% increase in transportation volumes favored this
Crude Oil: In this segment, operating margin was $40.5 million,
up significantly by 78.1% year over year due to increased crude
oil transportation volumes and rates.
Marine Storage: This segment's operating margin increased 38.1%
year over year to $32.9 million, due to significant decrease in
operating expenses partially offset by lower utilization level.
Management at Magellan Midstream hiked its expected distributable
cash flows for full-year 2013 by $50.0 million to $630.0 million.
The partnership also announced increased annual distribution
growth target of 16% and 15% for the year 2013 and 2014
respectively. Magellan guided toward third quarter and full-year
2013 earnings per unit of 48 cents and $2.50, respectively.
Magellan Midstream maintained its plans to spend approximately
$900 million on growth projects in 2013, with expenditures of an
additional $320 million in 2014 to complete the projects.
Moreover, the partnership will continue to put in more than $500
million in potential growth projects.
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Magellan Midstream currently retains a Zacks Rank #2 (Buy),
implying that it is expected to outperform the broader U.S.
equity market over the next 1 to 3 months.
In addition to Magellan Midstream, there are other pipeline
operators that are expected to perform well in the next three
months. These include
Delek Logistics Partners LP
Pioneer Southwest Energy Partners LP
Rose Rock Midstream LP
). All the stocks carry a Zacks Rank #2 (Buy).