Buckeye Partners' Q3 Earnings Rise on Segment Strength - Analyst Blog

Buckeye Partners, L.P. (BPL) reported third-quarter 2014 earnings from continuing operations of 89 cents per unit, in line with the Zacks Consensus Estimate. On a year-over-year basis, earnings escalated 15.6% on the back of solid performance at all the segments.
 

Total Revenue

In the quarter under review, Buckeye Partners' total revenues were $1,573 million, surpassing the Zacks Consensus Estimate of $1,220 million by almost 29%. The top line surged 46.5% year over year.

Total revenues improved mainly on the back of increased contribution from Buckeye Partners' Merchant Services (up nearly 53% year over year), Global Marine Terminals (up 71%), Development & Logistics (up 28%) and Pipeline and Terminals (up 17.4%) segments.

Operational Highlights

In the third quarter, Buckeye Partners' adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations shot up 28.4% year over year to $200.6 million.

Total cost and expenses were $1,424.5 million, up 48.9% year over year primarily due to higher cost of product sales and operating expenses.

The partnership's operating income increased 27.5% to $148.9 million from $116.8 million a year ago.

Interest and debt expenses during the quarter rose 27.7% year over year to $43.8 million, primarily due to a higher debt level.

Financial Screening

As of Sep 30, 2014, Buckeye Partners had cash and cash equivalents of $6.5 million compared with $5.0 million as of Dec 31, 2013.

Long-term debt, as of Sep 30, 2014, was $3,663.7 million compared with $3,092.7 million as of Dec 31, 2013.

During the quarter, total capital expenditures were $99.3 million, down nearly 9% from the prior-year period.

Business Update

In the reported quarter, Buckeye Partners announced the acquisition of an 80% stake in Buckeye Texas Partners venture. This will provide Buckeye Partners a vertically integrated system of midstream assets in the lucrative U.S. Gulf Coast market.

The partnership has announced a third-quarter 2014 cash distribution of $1.125 per limited partner unit, up around 5% from the prior-year payout. This will be paid on Nov 25, 2014 to unitholders of record as of Nov 18.

Other Earnings Releases

Energy Transfer Partners LP (ETP) reported third-quarter 2014 earnings of 44 cents per limited partner unit, lagging the Zacks Consensus Estimate of 66 cents.

ONEOK Partners, L.P. (OKS) reported third-quarter 2014 adjusted earnings of 63 cents per unit, surpassing the Zacks Consensus Estimate of 62 cents by 1.6%.

Plains All American Pipeline, L.P. (PAA) reported third-quarter 2014 adjusted earnings of 49 cents per unit, missing the Zacks Consensus Estimate of 51 cents by 3.9%.

Zacks Rank

Buckeye Partners currently carries a Zacks Rank #4 (Sell).