Plains All American Pipeline, L.P
) announced third-quarter 2013 operating earnings of 50 cents per
unit, beating the Zacks Consensus Estimate of 44 cents by
13.6%. However, earnings were lower than 73 cents reported
in the year-ago quarter.
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GAAP earnings per unit in the quarter were 38 cents versus
earnings of 27 cents in the third quarter of 2012.
The difference between GAAP and operating earnings during the
reported quarter was due to the impact of a few one-time items.
These include a 17 cent loss from derivative activities, and a
combined 5 cent gain coming from foreign currency revaluation,
favorable tax treatment and other items.
Total revenues at Plains All American Pipeline at the end of the
third quarter were $10.7 billion versus $9.4 billion in the
year-ago period, reflecting growth of 13.8%. All the three
segments performed well with the major upside coming from the
14.8% growth in the Supply & Logistics segment.
Reported quarter revenues surpassed the Zacks Consensus Estimate
of $9.93 billion by 7.7%.
Transportation: Segment revenue rose 3.8% year over year
primarily due to higher pipeline volumes stemming from crude oil
production increases in its service territories.
Facilities: Revenue surged 6.9% year over year in the reported
quarter. The growth was driven by increased in crude oil rail
Supply & Logistics: Revenue from this segment soared
14.8% from the prior-year quarter.
Total cost and expenses during the quarter increased 15.3% over
the year-earlier quarter, but contracted 10 basis points as a
percentage of total revenue.
The growth in revenue during the quarter along with the relative
decline in costs boosted the operating income which increased
19.8% from the year-ago period to $296 million.
Interest charges of the partnership decreased marginally by 2.7%
to $72.0 million from $74.0 million in third quarter 2012.
Cash used in operating activities during the quarter was $257
million versus $533 million in the same period of 2012.
Long-term debt of the partnership as of Sep 30, 2013, was $7.01
billion versus $6.32 billion as of Dec 31, 2012. The long-term
debt-to-capital ratio at the end of the quarter was 48%.
The partnership expects net income in the fourth quarter to range
from $185 million to $247 million and earnings per unit in the
vicinity of 57 cents to 75 cents..
Plains All American Pipeline expects net income in 2013 to range
from $949 million to $1,011 million and earnings per unit between
$2.92 to $3.09.
Net revenue in the fourth quarter and 2013 is expected to range
from $924 million to $959 million and $3,850 million to $3,885
Plains All American Pipeline expects to invest $1,600 million to
$1,725 million in 2013, of which $165 million to $185 million
will be earmarked for maintenance capital expenditure.
Magellan Midstream Partners L.P.
) third quarter 2013 operating earnings per unit of 58 cents
trailed the Zacks Consensus Estimate by 4 cents.
El Paso Pipeline Partners, L.P.
) announced third-quarter 2013 operating earnings of 40 cents per
unit, lagging the Zacks Consensus Estimate by 7 cents.
Energy Transfer Equity, L.P.
) reported third-quarter 2013 earnings per unit of 35 cents,
lagging the Zacks Consensus Estimate by 17 cents.
Plains All American recorded a sound quarter with revenues
exceeding expectation in all segments. This is definitely
impressive as quite a few operators in this sector have failed to
The partnership attained its cash distribution growth target of
9% to 10% for 2013. The quarterly distribution of 60 cents
reflects a 10.6% increase over the quarterly distribution paid in
The partnership is continuously investing in its existing
projects. Projects already completed or on the anvil have put the
partnership in good stead for future growth.
Commodity price fluctuations and weather patterns in areas of
operation play an important role in demand creation. Given the
degree of uncertainty, the company holds a Zacks Rank #3 (Hold).