Natural gas pipeline operator Energy Transfer Partners LP ETP reported second-quarter 2015 earnings from continuing operations of 67 cents per limited partner unit that breezed past the Zacks Consensus Estimate of 47 cents. Strong performance by the midstream segment and higher contribution from Sunoco supported the beat.
However, the bottom line declined from the prior-year quarter adjusted earnings of 79 cents per share.
Quarterly revenues decreased 18% year over year to $11,540 million and also failed to meet the Zacks Consensus Estimate of $13,644 million.
Quarterly Cash Distribution
Last month, Energy Transfer Partners announced second-quarter distribution of $1.035 per unit ($4.14 per unit annualized), a 2 cent improvement from the previous quarter. This marks the eighth consecutive quarterly distribution hike by the partnership.
EBITDA & Operating Income
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter were $1,488 million, up from $1,393 million a year ago.
The partnership reported operating income of $888 million, substantially higher than $768 million in second-quarter 2014.
Total Expense
Energy Transfer Partners reported total expenses of $10,652 million for second-quarter 2015, which reflects a year-over-year decline of 20%.
Distributable Cash Flow
Energy Transfer Partners’ adjusted distributable cash flow came in at $894 million, significantly higher than the prior-year quarter level of $745 million.
Capital Expenditure
Maintenance capital expenditure totaled $100 million compared with $74 million in the second quarter of 2014.
Balance Sheet
As of Jun 30, 2015, Energy Transfer Partners had long-term debt (less current maturities) of $29,058 million. Debt-to-capitalization ratio was about 51.1%.
Capex Guidance
The partnership expects growth capital expenditure of $8,060–$8,710 million for full-year 2015. Maintenance capital expenses are anticipated between $465 million and $555 million for the same duration.
News Update
Energy Transfer Partners announced that its subsidiary – ETP Crude LLC – has started an open season for the Delaware Basin Crude Gathering Pipeline. The new pipeline will have crude oil transportation capacity of about 120,000 barrels per day.
The open season is expected to close on Sep 4 and the pipeline is likely to be placed into service by the first half of next year.
Zacks Rank
Energy Transfer Partners currently carries a Zacks Rank #3 (Hold).
Some better-ranked players from the oil and gas production/pipeline MLP space are Valero Energy Partners LP VLP, Buckeye Partners, L.P. BPL and CONE Midstream Partners LP CNNX. While Valero Energy Partners sports a Zacks Rank #1 (Strong Buy), Buckeye Partners and CONE Midstream Partners hold a Zacks Rank #2 (Buy).
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