Pipeline operator Magellan Midstream Partners LPMMP delivered earnings per unit (EPU) - excluding mark-to-market commodity-related pricing adjustments - of $1.04. The bottom line beat the Zacks Consensus Estimate of 94 cents and also improved from the year-ago earnings of 86 cents per unit. The outperformance came on the back of higher contributions from Magellan's core fee-based transportation and terminal activities.
Total revenue of $615 million increased 7.3% year over year. The top line also beat the Zacks Consensus Estimate of $586 million.
Distributable Cash Flow
Magellan Midstream's distributable cash flow for the fourth quarter was $277.2 million, up 7.9% from the year-ago quarter.
On Jan 24, 2017, Magellan Midstream announced that its board of directors approved an increase in fourth-quarter cash distribution. The new distribution of 85.5 cents per unit represents a sequential hike of 2% and a year-over-year improvement of 9%.
Refined Products: Quarterly operating profits were approximately $191.1 million, down almost 6.6% from the year-ago quarter. The decline stemmed from ineffective hedging of the partnership's commodity-related activities.
Crude Oil: Operating margin was approximately $111.7 million, up 14.8% from the prior-year quarter.
Marine Storage: Operating margin was $35.1 million, up 16.8% from the year-ago quarter. Higher average rates from contract renewals and escalations, new storage tanks at the partnership's Corpus Christi, TX facility as well as overall increased customer activity in the current period led to the outperformance.
Magellan Midstream continues to project at least 8% annual distribution growth for 2017. Distributable cash flow projection for this year is approximately $1.0 billion.
Magellan Midstream Partners L.P. Price and Consensus
Magellan Midstream guided first-quarter and full-year 2017 earnings per unit of 90 cents and $3.75, respectively.
Zacks Rank & Other Stocks
Magellan Midstream currently carries a Zacks Rank #3 (Hold), implying that the partnership will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. BAK , McDermott International, Inc. MDR and Suncor Energy Inc. SU . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
In the last quarter, McDermott posted a positive earnings surprise of 250.00%.
In the last quarter, Suncor posted a positive earnings surprise of 300.00%.
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