Buckeye Beats Estimates - Analyst Blog
August 05 2011 - 12:09PM
Zacks
Buckeye Partners L.P. (BPL) announced
second-quarter 2011 operating earnings of $1.00 per limited partner
unit, surpassing the Zacks Consensus Estimate of 80 cents per unit.
The results of the partnership were higher than the year-ago
earnings of 58 cents per unit.
Total Revenue
Total revenue of the partnership at the end of the second
quarter was $1.07 billion versus $0.67 billion in the year-ago
quarter, reflecting a growth of 61.4%.
Revenue of the partnership during the quarter was barely higher
than the Zacks Consensus Estimate of $1.06 billion.
Quarterly Highlights
Higher revenues owed primarily to a solid performance at
Energy Services. Revenue from Energy
Services increased a substantial 72.2% year over year to $0.86
billion, constituting 80.2% of total revenue versus 75.2% in the
year-ago quarter. International
Operations constituted 4.9% of total revenue in the
reported quarter.
During the quarter the partnership saw costs and expenses rise
66.5%, as input costs shot up 71.3% and operating expenses grew
30.4% year over year.
Despite cost overruns, operating profit remained unscathed
because of a solid top line. During the second quarter 2011 the
operating income of the partnership increased by 19.5% year over
year.
Interest and debt expenses at the end of second quarter 2011
were $28.5 million, higher than $21.3 million reported in the
year-ago quarter.
Financial Update
Total cash and cash equivalents as of June 30, 2011, were $18.1
million versus $13.7 million as of December 31, 2010.
Buckeye's long-term debt as of June 30, 2011 was $2.2 billion
compared with $1.52 billion of long-term debt as of December 31,
2010.
Buckeye spent $62.4 million on capital expenditure during the
quarter compared with $16.6 million in the previous year quarter.
The rise in capital expenditure was mainly due to the partnership’s
expansion in international operations, plus the spends on iits
Pipeline & Terminals segment.
Cash Distribution
The partnership once again raised its cash distribution rate to
be paid to unit holders. The current distribution rate of the
partnership stands at $1.0125 per unit, which reflects a 5.2%
increase from the second quarter 2010 cash distribution per unit of
0.9625 cents. The distribution will be payable on August 31, 2011
to unitholders of record on August 15, 2011.
At the Peer
Ferrellgas Partners, L.P. (FGP), which competes
with Buckeye Partners, reported earnings per unit of 32 cents in
the third quarter of fiscal 2011, below the Zacks Consensus
Estimate of 54 cents. The results were also 9 cent short of the
year-ago figure.
Ferrellgas Partners' total revenue of $732.4 million in
the quarter was 19.0% higher than $615.3 million reported in the
comparable year-ago period. The results of the partnership also
outpaced the Zacks Consensus Estimate of $698 million.
Our View
Buckeye's solid showing this quarter owes much to contributions
from recent acquisitions and strong legacy assets.
In July 2011, the partnership purchased a liquid petroleum
products terminal in Bangor, Maine as well as a 124-mile pipeline
that connects the Bangor terminal to a marine terminal in South
Portland, Maine. We believe this deal will prove beneficial for the
partnership as proven in the past.
Buckeye Partners currently retains a Zacks #5 Rank (short-term
Strong Sell rating).
Based in Houston, Texas, Buckeye Partners, L.P. primarily
operates refined petroleum products pipeline systems in the United
States.
BUCKEYE PARTNRS (BPL): Free Stock Analysis Report
FERRELLGAS -LP (FGP): Free Stock Analysis Report
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