TC PipeLines LP
) posted stellar first-quarter 2014 results. Higher short-term
revenue generation from the Gas Transmission Northwest LLC (GTN),
Northern Border and Great Lakes pipelines, due to the severe cold
months, led to the outperformance.
The market reacted positively to the result as TC PipeLines
gained nearly 4% on Apr 28, settling at $52.90. This also marked
a new 52-week high for the partnership.
The Calgary, Alberta-based master limited partnership (MLP)
reported first quarter earnings per unit (EPU) of 90 cents, 73%
higher than the prior-year quarter level of 52 cents and also
above the Zacks Consensus Estimate of 59 cents.
Distribution & Cash Flows
TC PipeLines announced first-quarter cash distribution of 81
cents per unit ($3.24 per unit annualized), up 3.9% from the
year-ago period and flat sequentially. The distribution will be
paid on May 15, to unitholders of record as of May 5.
The partnership's total cash flows during the reported quarter
increased about 40.0% from the year-ago quarter to $60.0 million.
The increase came on the back of additional cash distributions
from TC PipeLines' extra 45% interest in GTN and Bison each,
acquired during the third quarter of 2013.
TC PipeLines distributed $52.0 million during the quarter, up
almost 21.0% from the year-ago level, as a result of the rise in
the quarterly distribution in July last year. An increase in
outstanding common units following the May 2013 equity offerings,
also aided the results.
Pipeline Systems' Performance
The partnership's equity income from the Great Lakes increased
significantly from $2 million in the prior-year quarter to $10
million. The improvement was due to revenues generated from
higher short-term services provided by the pipeline during the
severe cold months.
Northern Border Pipeline:
Equity income from the Northern Border Pipeline was $23.0
million, up 43.8% year over year, favored by the winter months.
As of Mar 31, 2014, TC PipeLines had $130.0 million outstanding
on the $500.0 million revolver portion of its senior credit
facility. The partnership had long-term debt (including current
portion) of $1,568.0 million, representing a
debt-to-capitalization ratio of 46.7%.
Zacks Rank & Other Stock Picks
The partnership currently carries 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 consider better-ranked players from the
same industry such as
Boardwalk Pipeline Partners, LP
Energy Transfer Equity, L.P.
Enterprise Products Partners L.P.
). While Boardwalk Pipeline sports a Zacks Rank #1 (Strong Buy),
Energy Transfer Equity and Enterprise Products Partners hold a
Zacks Rank #2 (Buy).
BOARDWALK PIPLN (BWP): Free Stock Analysis
ENTERPRISE PROD (EPD): Free Stock Analysis
ENERGY TRAN EQT (ETE): Free Stock Analysis
TC PIPELINES (TCP): Free Stock Analysis
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