PAA Natural Gas Storage L.P.
) posted second-quarter 2012 operating earnings of 25 cents per
unit, beating the Zacks Consensus Estimate of 21 cents and the
year-ago figure of 23 cents per unit.
The results were driven by disciplined business strategy,
well-positioned assets, a high percentage of multi-year fee-based
contracts, and continued successful execution by the partnership.
Including the items that affect comparability between reporting
periods, PAA Natural Gas reported earnings of 23 cents per unit
compared with 22 cents per unit in the prior-year quarter on a GAAP
Overall revenue at PAA Natural Gas Storage at the end of
second-quarter 2012 was $100.1 million versus $54.4 million in the
year-ago period, reflecting a significant growth of 84.2%. The
figure also surpassed the Zacks Consensus Estimate of $57 million.
Revenue from Firm storage services was $35.5 million, marginally up
0.16% year over year. Hub services and merchant storage generated
revenue of $64.3 million, up 253.3% year over year. However,
revenues from Other declined 55.5% year over year to $330 million.
Storage related costs in the quarter under review spiked 213.6%
year over year to $64.5 million. Field operating costs inched up
3.2% year over year to $3 million. Adjusted EBITDA during the
reported quarter was $29.7 million, up from $27.5 million in the
year-ago quarter driven by storage capacity expansions and
increased hub services activities.
Current assets at the end of June 30, 2012 were $77.4 million, down
from $0.376 million as of June 30, 2011. Current liabilities were
$108.8 million, up from $37.2 million as of June 30, 2011. Notes
Plains All American Pipeline L.P.
) at the end of second-quarter 2012 was $200 million, flat year
The new quarterly distribution rate of the partnership is 0.3575
cents per unit, or $1.43 per unit on an annualized basis, payable
on August 14, 2012. The new distribution rate is in line with the
quarterly distribution rate but shows an increase of 3.6% year over
MAGELLAN MDSTRM (MMP): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
PAA NATURAL GAS (PNG): Free Stock Analysis
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For the third quarter of 2012, PAA Natural Gas Storage expects
Total Net Revenue to be in the range of $32.9 million to $35.9
million, adjusted EBITDA to be in the range of $25 million to $29
million and adjusted earnings per unit to be in the range of 18
cents to 24 cents.
During full-year 2012, the partnership expects Total Net Revenue to
be in the range of $145.1 million to $151.1 million, adjusted
EBITDA to be in the range of $116 million to $124 million and
adjusted earnings per unit to be in the range of 95 cents to $1.08.
At the peer
Recently, one of company's peers,
Magellan Midstream Partners, L.P.
) announced strong second-quarter 2012 earnings, aided by higher
demand and rates for its services. The Tulsa, Oklahoma-based oil
distributor reported earnings per unit of $1.01 (excluding
mark-to-market commodity-related pricing adjustments), surpassing
the Zacks Consensus Estimate of 87 cents and the year-ago adjusted
profit of 91 cents. Total revenue came in at $449.5 million, up
17.3% year over year, but was below the Zacks Consensus Estimate of
PAA Natural Gas Storage performed well during the quarter beating
our expectations. Moreover, the results were near the higher end of
the partnership's guidance range of 20 cents to 26 cents per
unit. Going forward, the partnership's asset base, contract
profile, financial position, low risk profile, economically
attractive expansion projects, low-cost storage capacity additions
at Southern Pines and Pine Prairie will help to add visibility to
However, we remain concerned due to the fluctuation in natural gas
prices, global capital and credit markets volatility, as well as
regulatory risks. The partnership presently retains a short-term
Zacks #3 Rank (Hold) rating.
PAA Natural Gas Storage, L.P. is a Delaware limited partnership
formed by Plains All American Pipeline L.P. The partnership is
engaged in acquisition, development, ownership, operation and
commercial management of natural gas storage facilities and
generates net revenue primarily from the provision of fee-based gas
storage services to its customers. The partnership presently
operates three natural gas storage facilities, which are located in
Louisiana, Mississippi and Michigan.