TC PipeLines LP
), announced weaker-than-expected third-quarter 2013 earnings.
Significant hike in partnership expenses along with reduced
equity earnings from Great Lakes impacted the results.
The Calgary, Alberta-based master limited partnership (MLP)
reported earnings per unit (EPU) of 58 cents, missing the Zacks
Consensus Estimate of 68 cents. Comparing year over year,
earnings fell 34.1% from a profit of 88 cents.
Distribution & Cash Flows
TC PipeLines announced third-quarter 2013 cash distribution of 81
cents per unit ($3.24 per unit annualized), an increase of 3.9%
from the year-ago period and flat sequentially. The distribution
will be paid on Nov 14, 2013, to unitholders of record as of Nov
The total partnership cash flows during the quarter was up 20.8%
to 58.0 million from the year-ago period. The increase came on
the back of additional cash distributions from TC PipeLines'
extra 45% interests in Gas Transmission Northwest LLC (GTN) and
Bison Pipeline LLC (Bison) each, acquired during the third
TC PipeLines distributed $52.0 million during the quarter, up
20.9% from the year-ago level, primarily driven by a rise in the
quarterly distribution. Hike in outstanding common unit following
the May 2013 equity offerings, has also aided the results.
Pipeline Systems' Performance
The partnership incurred equity loss of $2.0 million from Great
Lakes in this quarter against equity earnings of $6.0 million in
the year-ago period. The year-over-year decline reflects the sale
of Great Lakes capacity at a reduced rate.
Northern Border Pipeline:
Equity income from the Northern Border Pipeline was $17.0
million, down 5.5% year over year on the back of lower flows from
TC PipeLines reported third-quarter 2013 partnership cost of
roughly $9.0 million, reflecting an increase of 50% from the
year-ago quarter. Additional interest expenses from term loan
taken by TC PipeLines to finance the extra 45% ownership in GTN
and Bison increased the cost.
As of Sep 30, 2013, TC PipeLines had $350.0 million outstanding
on the $500.0 million revolver portion of its senior credit
facility. The partnership has long-term debt (including current
portion) of $1,551.0 million, representing a
debt-to-capitalization ratio of 45.9%.
The partnership currently retains a Zacks Rank #3 (Hold). This
implies 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 energy stocks like
Matador Resources Company
TransAtlantic Petroleum Ltd.
Vermilion Energy Inc.
) that offer better prospects. All the stocks sport a Zacks Rank
#1 (Strong Buy).
MATADOR RESOURC (MTDR): Free Stock Analysis
TRANSATL PETROL (TAT): Free Stock Analysis
TC PIPELINES (TCP): Free Stock Analysis
VERMILION EGY (VET): Free Stock Analysis
To read this article on Zacks.com click here.