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Spectra Energy (SE) Lags Q4 Earnings Estimate, Down Y/Y

Premier natural gas company, Spectra Energy Corp.SE reported fourth-quarter 2015 earnings per share from continuing operations of 28 cents. The bottom line not only lagged the Zacks Consensus Estimate of 33 cents but also deteriorated 40.4% from the year-ago earnings of 47 cents.

Spectra Energy Corporation (SE) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

The company's operating revenues of $1,316.0 million plunged 21.6% from the year-earlier level of $1, 600.0 million and also came in below our estimate of $1,723.0 million.

Full-year 2015 earnings from continuing operations of $1.15 per share was below the Zacks Consensus Estimate of $1.19 and decreased 29% from the year-earlier profit level of $1.62. Total revenue in 2015 declined 11.3% year over year to $5,234.0 million and missed the Zacks Consensus Estimate of $5,495 million.

Operational Analysis

Spectra Energy Partners : The segment posted quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $484.0 million, up 9% from the year-ago quarter. This was attributable to the expansions, primarily in natural gas transmission business.

Distribution : The segment reported a year-over-year decrease of 14.4% in its EBITDA to $113.0 million from $132.0 million. The adverse effect of a weaker Canadian dollar resulted in the decrease.

Western Canada Transmission & Processing : The segment witnessed an EBITDA of $109.0 million, down 56.4% from the year-earlier level. Lower earnings from the Empress processing facility led to the downside.

Field Services : The segment reported a loss of $208 million, significantly wider than a loss of $18.0 million in the prior-year quarter. The decrease in equity earnings was mainly attributable to lower commodity prices.

Production and Price Realizations

The company produced natural gas liquids (NGLs) of 409 thousand barrels per day (MBbl/d), down from the year-ago quarter level of 447 MBbl/d. Price of NGLs averaged 42 cents per gallon (down 38.2% year over year), while crude oil averaged approximately $42.2 per barrel (down 42.4% year over year). Natural gas was sold at $2.27 per million British thermal units (MMBtu) as against $4.00 per MMBtu in the fourth quarter of 2014.

Balance Sheet

As of Dec 31, 2015, Spectra Energy had long-term debt of approximately $12,892 million with a debt-to-capitalization ratio of 57.5% (as against 56.5% in the preceding quarter).

Ranks

Spectra Energy carries a Zacks Rank #3 (Hold).

Some better-ranked players from the oil and gas sector are Cheniere Energy Partners LP. CQP , Braskem S.A. BAK and Enviva Partners, LP EVA . Each of these stocks sports a Zacks Ranked #1 (Strong Buy).

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SPECTRA ENERGY (SE): Free Stock Analysis Report

BRASKEM SA (BAK): Free Stock Analysis Report

CHENIERE ENERGY (CQP): Free Stock Analysis Report

ENVIVA PARTNERS (EVA): Free Stock Analysis Report

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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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