Buckeye (BPL) Tops Q3 Earnings, Lags Revenue Estimates

Buckeye Partners, L.P.BPL reported third-quarter 2016 earnings of $1.19 per unit, surpassing the Zacks Consensus Estimate of 98 cents by 21.4%. The reported figure was also up from the year-ago tally of 78 cents.

The year-over-year upside was driven primarily by the Domestic Pipelines & Terminals segment on the back of a $14 million payment resulting from a customer's exercise of an early buyout of a crude-by-rail throughput services contract.

Total Revenue

In the quarter under review, Buckeye Partners' total revenue came in at $766.6 million, missing the Zacks Consensus Estimate of $800 million by 4.2%. Quarterly revenues were, however, up 5.2% year over year owing to higher contribution from the Transportation, storage and other services segment.

Operational Highlights

In the third quarter, the partnership's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations surged 33.1% year over year to $271.6 million.

Total costs and expenses were $560.4 million, down 4.2%. The partnership managed to cut overall costs primarily on the back of cost savings at Merchant Services.

The partnership's operating income increased 44% to nearly $206 million from $144 million a year ago.

Interest and debt expenses were up 11.7 % to $48.4 million.

BUCKEYE PARTNRS Price, Consensus and EPS Surprise

BUCKEYE PARTNRS Price, Consensus and EPS Surprise | BUCKEYE PARTNRS Quote

Financial Screening

As of Sep 30, 2016, Buckeye Partners had cash and cash equivalents of $0.002 million, compared with $4.9 million as of Dec 31, 2015.

Long-term debt as of Sep 30, 2016 was $3,826.8 million, up from $3,732.8 million as of Dec 31, 2015.

Total capital expenditure in third-quarter 2016 was $155.9 million, up 15.7% from $134.7 million a year ago.

Cash Distribution Update

The partnership announced third-quarter 2016 cash distribution of $1.2250 per limited partner unit, up 4.3% from the prior-year payout of $1.1750. The revised dividend will be paid on Nov 22, 2016 to unit holders of record as of Nov 15.

Recent Acquisition

On Oct 24, Buckeye Partners signed an agreement to purchase 50% equity interest in the holding company of VTTI Energy Partners LP VTTI for $1.15 billion. Upon completion, 50% of VTTI will be owned by Buckeye and the remaining 50% by Vitol.

Through this acquisition, Buckeye Partners will be able to leverage VTTI's international presence and pursue its plan of investing in terminal assets in strategic energy hubs.

Upcoming Peer Releases

Boardwalk Pipeline Partners, LP BWP is scheduled to report third-quarter 2016 earnings on Oct 31. The Zacks Consensus Estimate stands at 19 cents.The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

CONE Midstream Partners LP CNNX is slated to announce third-quarter 2016 earnings on Nov 4. The Zacks Consensus Estimate is pegged at 37 cents.CONE Midstream also carries a Zacks Rank #1.

Zacks Rank

Buckeye Partners currently carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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