San Antonio-based publicly traded partnership
NuStar Energy L.P.
) reported better-than-expected first-quarter results, owing to
improved performance from the pipeline business unit. Decrease in
total operating expenses also favored the results.
The partnership's first-quarter results were out before the
opening bell on Apr 23, 2014. NuStar closed at $56.95 per unit on
that day, reflecting a marginal increase from the previous day's
closing price, owing to the favorable results.
NuStar's earnings per unit (EPU) - from continuing operations -
came in at 40 cents, beating the Zacks Consensus Estimate of 37
cents. The bottom line also increased from the year-ago figure of
10 cents per unit.
Revenues of $849.2 million surpassed the Zacks Consensus Estimate
of $766.0 million. However, the top line was 14.9% below the
year-ago level, mainly due to lower quarterly sales from the
NuStar announced quarterly distribution of $1.095 per unit ($4.38
per unit annualized), which remains unchanged from the previous
quarter's distribution. The distribution is payable on May 12,
2014, to unitholders of record as on May 7, 2014.
Distributable cash flow (DCF) available to limited partners for
the first quarter was $77.9 million or $1.00 per unit (providing
0.91x distribution coverage), compared with $57.1 million or 73
cents per unit in the year-earlier quarter.
Total quarterly throughput volumes in the Pipeline segment were
832,389 barrels per day (Bbl/d) representing a marginal increase
of 1.2% from the year-ago period.
The throughput volumes in the crude oil pipelines increased 2.3%
from the year-ago quarter to 359,418 Bbl/d. Moreover, throughput
revenues rose 10.4% to $103.0 million. The segment's operating
income increased 32.9% year over year to $53.0 million on an
increase in throughput volumes and a drop in operating expenses.
Throughput volumes in the Storage segment improved 22.7% year
over year to 821,338 Bbl/d.
However, quarterly revenues were down 6.4% to $132.6 million from
the first quarter of the previous year. The segment reported
profit of $42.0 million, indicating deterioration from $54.0
million in the year-ago quarter, owing to the segment's higher
The unit reported an income of $10.0 million, against the
year-ago quarter loss of about $1.6 million. A decrease in
operating expenses led to the improvement.
The partnership recorded total operating costs of $106.1
million, down 6.6% year over year.
BOARDWALK PIPLN (BWP): Free Stock Analysis
ENTERPRISE PROD (EPD): Free Stock Analysis
ENERGY TRAN EQT (ETE): Free Stock Analysis
NUSTAR ENERGY (NS): Free Stock Analysis
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As of Mar 31, 2014, the partnership had total debt of $2,710.1
million, representing a debt-to-capitalization ratio of 59.5%.
NuStar expects its second-quarter 2014 EPU to come in ahead of
the year-ago quarter's profit. Moreover, the partnership
continues to believe that 2014 operating profits from its
pipeline business unit will register a $40.0 to $60.0 million
increase from the 2013 level. Additionally, the adjusted 2014
operating profit from storage business is likely to be in line
In 2014, NuStar plans to invest $350 million to $370 million in
growth projects. The key focus of the investment will be on the
Stocks to Consider
NuStar currently carries a Zacks Rank #4 (Sell), implying that it
is expected to underperform the broader U.S. equity market over
the next one to three months.
Meanwhile, one can look at better-ranked players from the same
Energy Transfer Equity LP
Boardwalk Pipeline Partners LP
Enterprise Products Partners LP
). Energy Transfer Equity sports a Zacks Rank #1 (Strong Buy),
while Boardwalk Pipeline Partners and Enterprise Products
Partners hold a Zacks Rank #2 (Buy).