Enterprise Products Partners L.P.’s EPD third-quarter 2017 adjusted earnings of 30 cents per limited partner unit lagged the Zacks Consensus Estimate by a penny. However, the bottom line was flat year over year.
Revenues in the quarter totaled $6,887 million, up from $5,920 million in the year-ago quarter. The figure also beat the Zacks Consensus Estimate of $6,660 million.
The year-over-year upside was attributed to an increase in volumes from all four segments of the master limited partnership during the oil price slump. This was partially offset by increased costs and expenses. The segments include NGL Pipeline & Services, Natural Gas Pipeline and Services, Crude Oil Pipelines & Services and Petrochemical & Refined Product Services.
Quarterly distribution at Enterprise Products increased 4.3% year over year to 42.25 cents per common unit, or $1.69 per unit on an annualized basis. Adjusted distributable cash flow of $1.1 billion provided coverage of 1.2x. The partnership retained $152 million in cash flow, thereby reducing financing needs.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise | Enterprise Products Partners L.P. Quote
Third-Quarter Segmental Performance
Gross operating income in the NGL Pipeline & Services segment increased to $771 million from $704 million in the year-ago quarter, but lagged the Zacks Consensus Estimate of $774 milion. The upside from the year-ago quarter can be attributed to contractual increases in committed volumes. Improved contribution from Mont Belvieu NGL and associated product storage business supported the segment. However, the positives were partially offset by the adverse impact of Hurricane Harvey.
Natural Gas Pipeline and Services’ gross operating income declined to $171 million from $179 million in the year-ago quarter, thanks to lower average capacity fees as well as higher operating costs.
Gross operating income from the Crude Oil Pipelines & Services segment was $190 compared with $254 million in the year-ago quarter. The decrease was mainly due to higher costs and the Hurricane effect.
Petrochemical & Refined Product Services segment reported gross operating income of $172.4 million compared with the year-earlier level of $171.6 million.
Financials
During the quarter, the partnership spent $1 billion. Outstanding total debt principal as of Sep 30, 2017 was $24.9 billion. Enterprise Products consolidated liquidity of $3.6 billion comprised unrestricted cash on hand and available borrowing capacity.
Q3 Price Performance
The pricing chart reveals that the company’s shares have outperformed the industry in the last three months. During this period, the company’s shares have lost 3.8% compared with the industry’s decline of 5.8%.
Zacks Rank
Enterprise Products Partners currently has a Zacks Rank #4 (Sell). A few better-ranked players in the energy sector are Braskem SA BAK, ConocoPhillips COP and SunCoke Energy Inc SXC. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The largest petrochemical operator in Latin America, Braskem, delivered a positive earnings surprise of 68.54% in the preceding quarter.
ConocoPhillips, based in Houston, TX, is a major global exploration and production company. It delivered an average positive earnings surprise of 152.34% in the last four quarters.
SunCoke Energy produces metallurgical coke in the United States. The company delivered an average positive earnings surprise of 113.52% for the last four quarters.
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