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Plains All American Misses on Q4 Earnings and Revenues

Plains All American Pipeline, L.P.PAA reported fourth-quarter 2015 adjusted earnings of 38 cents per unit, lagging the Zacks Consensus Estimate of 46 cents by 17.4%. Quarterly earnings declined 36.7% year over year.

Plains All American Pipeline's GAAP earnings were 24 cents per unit in the fourth quarter of 2015, 67% lower than the year-ago quarter. The difference between GAAP and pro forma numbers was due to long-term inventory costing adjustments, Line 901 incident and deferred income tax expense.

In 2015, earnings were $1.48 per unit, beating the Zacks Consensus Estimate of $1.00 by 48%. However, earnings were down 35% year over year.

Total Revenue

The partnership reported total revenues of $4,996 million, short of the Zacks Consensus Estimate of $6,181 million by 19.2% and year-ago revenues by nearly 47.2%.

In 2015, total revenues were $23,152 million, down 46.8% year over year and short of the Zacks Consensus Estimate by 4.9%.

The downslide in 2015 was due to lower sales at the partnership's Transportation (down 3.7%), Facilities (6.9%) and Supply & Logistics (47.9%) segments.

Highlights of the Release

Plains All American's total cost and expenses went down 47.9% to $4,652 million over the prior year primarily due to lower purchases and related costs (down 50.7%), and field operating costs (9.3%).

The partnership's operating income plunged 35.3% to $344 million from $532 million a year ago.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $563 million in the fourth quarter, down 5% from $594 million a year ago.

Interest expenses (net) rose 16.9% year over year to $111 million from $95 million a year ago.

Adjusted segment profit in the fourth quarter was $563 million, down 5.2% year over year.

Segment Details

Transportation segment's adjusted profit was $256 million in the fourth quarter, down 5% year over year. The decline was primarily due to lower pipeline loss allowance revenue, partially offset by higher equity earnings from its 50% interest in the BridgeTex pipeline.

Facilities segment's adjusted profit was $150 million in the fourth quarter, down 1% year over year. The decline was primarily due to lower revenues associated with its rail and natural gas storage activities, partially offset by increased storage revenue at its west coast terminals.

Supply & Logistics segment's adjusted profit of $157 million in the fourth quarter decreased 1% year over year. The decline was primarily due to lower volumes and margins associated with crude oil lease gathering due to less favorable market conditions as a result of increased competition.

Financial Condition

As of Dec 31, 2015, Plains All American's current assets were $2,969 million compared with $4,179 million as of Dec 31, 2014.

As of Dec 31, 2015, long-term debt was $10,375 million compared with $8,704 million as of Dec 31, 2014.

The long-term debt-to-total book capitalization ratio at the end of 2015 was 57% compared with 52% at the end of 2014.

Upcoming Releases

Summit Midstream Partners, LP SMLP will report fourth-quarter results on Feb 25, 2016. The Zacks Consensus Estimate is pegged at a loss of 3 cents.

TC PipeLines, LP TCP will report fourth-quarter earnings on Feb 24, 2015. The Zacks Consensus Estimate is pegged at 69 cents.

Rose Rock Midstream, L.P. RRMS is expected to report fourth-quarter earnings after the market closes on Feb 25, 2016. The Zacks Consensus Estimate is pegged at 37 cents.

Zacks Rank

Plains All American currently holds a Zacks Rank #4 (Sell).

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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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