San Antonio-based publicly traded partnership
NuStar Energy L.P.
) announced weak fourth quarter profits, hamstrung by higher
operating expenses in its storage business.
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The owner and operator of crude oil and refined products
pipelines and storage facilities reported earnings per unit (EPU)
- excluding special items - of 25 cents, well below the Zacks
Consensus Estimate of 31 cents and the year-ago profit of 30
Revenue of $984.8 million was 46.0% below the year-earlier level
but comfortably surpassed the Zacks Consensus Estimate of $634.0
million on the back of strong service sales.
NuStar announced a quarterly distribution of $1.095 per unit
($4.38 per unit annualized), which remains unchanged from the
year-earlier as well as previous-quarter distributions. The
distribution is payable on Feb 14 to unitholders of record as on
Feb 11, 2013.
Distributable cash flow (DCF) available to limited partners for
the fourth quarter was $57.1 million or 73 cents per unit
(providing 0.67x distribution coverage), compared with $59.5
million or 90 cents per unit in the year-earlier quarter.
Quarterly throughput volumes in the Transportation segment were
up 4.4% year over year to 923,609 barrels per day. The
improvement can be attributed to higher crude oil pipelines
throughput that benefited from the completion of two growth
capital projects in the Eagle Ford shale during 2012.
The increased throughput, together with higher pipeline tariffs
pushed the segment operating income up by 11.4% year over year to
$47.9 million. Operating revenue increased 12.3% to $95.5
Throughput volumes in the Storage segment rose 8.0% year over
year to 794,335 barrels per day. However, revenues were
essentially flat at approximately $148.5 million on the back of a
4.8% fall in the storage lease revenue (that makes up 81% of the
Quarterly operating income reached $33.9 million (down 36.2%
year-over-year), pulled down by higher operating expenses.
Asphalt and Fuels Marketing:
With the closure the previously announced sale of 50% interest in
its asphalt operations to privately held investment firm Lindsay
Goldberg LLC during the third quarter. The resulting joint
venture has been deconsolidated from NuStar's financials and
therefore the segment results currently reflect only the
partnership's fuels marketing operations. This helped the unit to
report a profit of $6.0 million, as against the earlier-year
quarter loss of $18.9 million.
Stocks to Consider
NuStar currently carries a Zacks Rank #3 (Hold), implying that it
is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at
Atlas Pipeline Partners L.P.
Enterprise Products Partners L.P.
Sunoco Logistics Partners L.P.
) as attractive investments. These oil/gas production pipeline
partnerships - all sporting Zacks Rank #2 (Buy) - offers value
and are worth accumulating at current levels.