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Plains All American (PAA) Q2 Earnings Beat, Revenues Miss

Zacks

Plains All American Pipeline, L.P. PAA reported second-quarter 2018 adjusted earnings of 38 cents per unit, beating the Zacks Consensus Estimate of 23 cents by 65.2%. Reported earnings surged 81% from 21 cents in the year-ago quarter.

In the quarter under review, the partnership reported GAAP earnings of 7 cents compared with 21 cents in the year ago quarter.

Total Revenues

In the second quarter, the partnership reported total revenues of $8,080 million, which missed the Zacks Consensus Estimate of $8,182 million by 12.95%.

Quarterly revenues were up 33% from $6,078 million in the year-ago quarter. The top line improved on the back of improved performance in the Transportation segment.

Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise


Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise | Plains All American Pipeline, L.P. Quote

Segment Performance

In the Transportation segment, adjusted EBITDA of $360 million increased 21% from the year-ago quarter’s tally, courtesy of increased volume of Permian Basin systems and contributions from Eagle Ford JV system. However, the upside was offset by the sale of assets in the Rocky Mountain and Central regions.

In the Facilities segment, adjusted EBITDA of $171 million declined 5% from the year-ago quarter. The downside was caused by the impact of asset sales.

The company incurred adjusted EBITDA loss of $26 million in the Supply and Logistics segment.

Highlights of the Release

In the quarter under review, Plains All American’s total cost and expenses were $7,992 million, up 37.3% year over year from $5,821 million. The uptick can be primarily attributed to increase in purchases and related costs. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $506 million, up 12.2% year over year.

Interest expenses declined 12.5% year over year to $111 million.

The partnership’s operating income declined 68% to $88 million from $275 million in the prior-year quarter.

Financial Update

As of Jun 30, 2018 current assets were $3,852 million compared with $4,000 million as of Dec 31, 2017.

As of Jun 30, 2018 Plains All American had long-term debt of $8,966 million compared with $9,183 million as of Dec 31, 2017. The total long-term debt-to-total book capitalization ratio was 45%, down from 46% at the end of 2017.

Guidance

Plains All American increased full-year 2018 adjusted EBITDA guidance to $2,400 million.

Expected adjusted EBITDA in the Transportation, Facilities and Supply & Logistics segment are $1,535 million, $690 million, and $175 million, respectively.

The partnership expects expansion capital to be $1,950 million, up from $1,135 million invested in 2017.

Plains All American continues to expect 14-15% fee-based Segment Adjusted EBITDA growth in 2019.

Zacks Rank

Plains All American carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oil & Gas Pipeline Releases

Buckeye Partners, L.P. BPL reported second-quarter 2018 earnings of 59 cents per unit, lagging the Zacks Consensus Estimate of 69 cents.

Magellan Midstream Partners L.P. MMP reported adjusted earnings per unit of $1.05, higher than the Zacks Consensus Estimate of $1.00.

Enterprise Products Partners L.P. EPD reported second-quarter 2018 adjusted earnings per unit of 46 cents, which beat the Zacks Consensus Estimate of 39 cents.

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