Enterprise Products Partners LP (EPD) reported third-quarter 2014 adjusted earnings per limited partner unit of 37 cents, in line with the Zacks Consensus Estimate. The bottom line improved from the year-ago adjusted quarterly earnings of 32 cents.
Record levels of natural gas liquid (NGL), crude oil, refined products and petrochemical pipeline volumes during the quarter, a higher NGL fractionation volume and improved fee-based natural gas processing volume primarily led to the improvement.
Enterprise transported 5,245 million barrels per day of NGL, crude oil, refined products and petrochemical products, up 2% on a year-over-year basis.
Quarterly distribution at Enterprise increased 5.8% year over year to 36.5 cents per common unit, or $1.46 per unit on an annualized basis. Distributable cash flow of $975 million provided coverage of 1.4x. The partnership has retained $284 million in cash flow, thereby reducing its financing needs.
Revenues in the quarter increased almost 2% year over year to $12.3 billion but fell short of the Zacks Consensus Estimate of $13.9 billion.
Stock Split
On Aug 2014, the partnership finished the two-for-one split of its common units, for which Enterprise got an approval from the general partners on Jul 15. The earnings per share in this article are posted in post split basis.
Third Quarter Segmental Performance
Gross operating income for the partnership’s NGL Pipeline & Services unit rose 11% year over year to $712 million.
Onshore Natural Gas Pipeline and Services’ gross operating income decreased 8.5% year over year to $195 million.
Gross operating income from Enterprise’s Onshore Crude Oil Pipelines & Services unit surged 31% year over year to $191 million.
Gross operating income in the Petrochemical & Refined Product Services unit jumped to $190 million from the year-earlier level of $117 million.
Offshore Pipelines & Services’ gross operating margin increased almost 24% year over year to $47 million.
Financials
During the quarter, the partnership spent $772 million, including $107 million of sustaining capital expenditures. Total outstanding debt principal at the end of the quarter was $19.7 million. As of Sep 30, 2014, Enterprise’s consolidated liquidity was roughly $4.8 billion, including $1.1 million of unrestricted cash on hand and almost $3.7 billion of available borrowing capacity under the partnership’s revolving credit facility.
Zacks Rank
Enterprise currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the energy sector like Magellan Midstream Partners LP (MMP), Delek Logistics Partners LP (DKL) and Cobalt International Energy Inc. (CIE). All these stocks sport a Zacks Rank #1 (Strong Buy).
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