Energy pipelines and terminals operator,
Sunoco Logistics Partners LP
) reported strong second-quarter 2013 results on the back of
robust performance by the new crude pipeline projects and sound
Sunoco's diluted earnings per unit (EPU) of $1.08 comfortably
surpassed the Zacks Consensus Estimate of 88 cents.
However, the partnership's per share profits came lower than the
second quarter 2012 level of $1.28 amid higher expenses.
Revenues of $4,311.0 million were up 30.1% from second quarter
2012 and surpassed the Zacks Consensus Estimate of $3,457.0
Distributable cash flow (DCF) increased 8.9% year over year to
Late last month, Sunoco raised its quarterly distribution by 5%
sequentially and 28% year over year to 60 cents per unit or $2.40
per unit annualized, representing the thirty-third consecutive
quarterly distribution increase.
Refined Products Pipeline System:
Adjusted earnings before interest, taxes, depreciation and
amortization expenses (EBITDA) in the 'Refined Products Pipeline
System' segment were $16.0 million, down 5.9% from second quarter
2012. The decrease was due to reduced operating gains and higher
costs. However, it was partially offset by contributions from
Sunoco's 'Terminal Facilities' business segment had an adjusted
EBITDA (excluding one-time items) of $80.0 million, up 8.1% year
over year. This outcome can be mainly attributed to improved
results from the acquisition and marketing initiatives of
Sunoco's refined products. Better performances at the Eagle Point
and Nederland terminals also supported the increase which was
partially offset by reduction in volumes and higher general and
Crude Oil Pipelines:
Adjusted EBITDA in the Crude Oil Pipeline System segment shot up
25.7% from the year-earlier level to $88.0 million, driven by
enhanced throughput volumes as a result of project expansions.
However, it was partially dampened by increased operating
Crude Oil Acquisition and Marketing:
Adjusted EBITDA in this segment was $70 million, 22.8% above the
second-quarter 2012 level. This reflects wider crude oil margins
and volumes supported by contribution from the increase in crude
oil trucking fleet.
Operating expenses for this quarter were $25.0 million,
representing a decrease of 7.4% from the second quarter of 2012.
Capital Expenditure & Balance Sheet
The partnership's maintenance capital expenditure and
expansion capital expenditure for the reported quarter totaled
$18.0 million and $174.0 million, respectively. Sunoco incurred
additional cost of $60.0 million as acquisition expenses.
As of Jun 30, 2013, Sunoco had $2,316.0 million in total debt
(consisting of $35.0 million of borrowing under the partnership's
credit facility), representing a total debt-to-capitalization
ratio of approximately 26.8%.
Stocks to Consider
Sunoco 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 other oil and gas pipeline master
limited partners (MLP) such as
Delek Logistics Partners LP
Magellan Midstream Partners LP
Pioneer Southwest Energy Partner
) as good investment opportunities. All three firms sport a Zacks
Rank #2 (Buy).
DELEK LOGISTICS (DKL): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
PIONEER SW EGY (PSE): Free Stock Analysis
SUNOCO LOGISTIC (SXL): Free Stock Analysis
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