Plains All American Pipeline, L.P. ( PAA ) announced
first-quarter 2013 pro forma earnings per unit of $1.26, surpassing
the Zacks Consensus Estimate by 38 cents. Quarterly earnings were
59.5% higher than the year-ago figure primarily due to strong
results from the fee-based Transportation and Facilities segments,
and proper implementation in the margin-based Supply and Logistics
segment.BP PLC (BP): Free Stock Analysis ReportEL PASO PIPELIN (EPB): Free Stock Analysis
ReportONEOK PARTNERS (OKS): Free Stock Analysis
ReportPLAINS ALL AMER (PAA): Free Stock Analysis
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On a GAAP basis, Plains All American Pipeline's earnings increased
149% year over year to $1.27 per unit. The variation between GAAP
and pro forma earnings were due to a penny gain from derivative
activities, foreign currency revaluation and other favorable
Revenues were $10.6 billion, beating the Zacks Consensus Estimate
by $0.9 billion and year-ago results by 15.2%.
Transportation: Adjusted profit from this segment
increased 1.2% year over year to $175 million due to higher
pipeline volumes and benefits from the acquisition of natural gas
liquids (NGL) assets from a subsidiary of BP plc (
Facilities: Plains All American Pipeline reported
adjusted profit of $156 million, up 56% year over year due to
addition of capacity from the BP NGL assets, acquisitions of rail
terminal and completion of organic projects.
Supply and Logistics: Segmental adjusted profit
increased 107% year over year due to proper implementation of
business models in favorable crude oil market conditions, higher
NGL sales volumes, and increase in lease gathering volumes and
Plains All American Pipeline's total costs and expenses increased
12% year over year to $10 billion due to increases in purchases and
related costs, field operating costs, general and administrative
expenses, and depreciation expenses.
The partnership's operating income increased 109.3% year over year
to $655 million.
Interest expenses totaled $77 million, up 18.5% year over year
primarily attributable to the rising long-term debt level.
As of Mar 31, 2013, Plains All American Pipeline's long-term debt
was $6,331 million versus $6,320 million as of Dec 31, 2012.
Net cash provided by operating activities during the first three
months of 2013 was $979 million, higher than $317 million in the
year-ago comparable period.
Cash Distribution Update
Plains All American Pipeline recently increased its quarterly cash
distribution by 2.2% sequentially and 10% year over year to 57.50
cents per unit on all of its outstanding limited partner units. It
will be paid on May 15, 2013, to unitholders of record as of May
Plains All American Pipeline expects its adjusted earnings before
interest, tax, depreciation and amortization (EBITDA) in 2013 to
increase by $135 million primarily due to the benefits of solid
first-quarter results and a marginal improvement for the
Other Company Releases
El Paso Pipeline Partners ( EPB ) announced
first-quarter operating earnings of 58 cents per unit, surpassing
the Zacks Consensus Estimate by 4 cents.
ONEOK Partners L.P. ( OKS ) reported
first-quarter earnings per unit of 42 cents, missing the Zacks
Consensus Estimate by 16 cents.
Positive impact of the acquisition of BP assets is evident in
Plains All American Pipeline's quarterly results. This acquisition
boosted its midstream business through addition of pipelines,
storage capacity, fractionation plants and supply contracts. These
factors will subsequently help to improve the partnership's
Plains All American Pipeline intends to invest additional $300
million in 2013 to strengthen its existing assets while expanding
operations in the U.S. and Canada. This additional investment will
push the capital expenditure to $1.4 billion.
However, we are cautious about stringent regulations and volatile
commodity pricing, which may to some extent challenge Plains All
American Pipeline's future results.
Houston, Texas-based Plains All American Pipeline owns assets
strategically located in well-established oil producing regions,
catering to major U.S. refinery and distribution markets. The
partnership currently has a Zacks Rank #3 (Hold).