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NuStar (NS) Q1 Earnings Miss, Sales Beat on Permian Strength
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NuStar Energy L.P.’s first-quarter 2018 earnings per limited partner unit of $1.15 per unit missed the Zacks Consensus Estimate of $1.19, due to Pipeline segment income. However, it surged 134.7% year over year from the year-ago earnings of 49 cents per unit, due to contributions from the partnership’s Permian Crude System. Moreover, increased storage rates at the partnership’s several international facilities supported the results.
NuStar’s operating income was $98.5 million, up 1.4% from the prior-year quarter. Moreover, the partnership recorded a net income of $126.1 million in the quarter under review, compared with $57.9 million in the year-ago quarter.
Quarterly revenues of $475.9 million surpassed the Zacks Consensus Estimate of $449 million. However, the top line was slightly lower than the year-ago level of $487.4 million, primarily due to a decline in product sales and other revenues in the Fuels Marketing segment.
Nustar Energy L.P. Price, Consensus and EPS Surprise
NuStar announced a quarterly distribution of 60 cents per unit ($2.40 per unit annualized), lower than the prior-quarter’s figure of $1.095. The reduced distribution – as part of the impending merger with its general partner –is payable on May 14 to its unitholders of record as of May 8, 2018.
Per NuStar’s latest earnings release, distributable cash flow available to limited partners in the first quarter was $91.7 million (providing 1.64x distribution coverage), compared with $88.9 million (providing 0.87x distribution coverage) in the year-ago quarter.
Segmental Performance
Pipeline: Total quarterly throughput volumes in the segment were 1,323,188 barrels per day (Bbl/d), up 43.4% from the year-ago period. While throughput volumes in the crude oil pipelines jumped 93.6% (owing to higher contribution from Permian crude system) from the year-ago quarter to 791,294 Bbl/d, refined product pipelines throughput inched up 3.5% to 531,894 Bbl/d.
As a result, throughput revenues rose 12.8% year over year to $136.8 million. However, operating and depreciation expenses rose 28% and 58.4%, respectively. Concurrently, the segment’s operating income of $57.8 million was down from the year-ago figure of $65 million.
Storage: Throughput volumes in the Storage segment surged 9.2% year over year to 343,933 Bbl/d. Higher storage terminal revenues, on the back of stronger contribution from Permian Crude System and increased storage rates at several facilities, drove the unit’s quarterly revenues from $147.4 million in the first quarter of 2017 to $155.3 million in the quarter under review. Moreover, the segment's operating income also witnessed a slight increase of 4.7% to come in at $56.3 in the reported quarter.
Fuels Marketing: Product sales and other revenues from this segment fell to $185.8 million from $222.7 million in the year-ago quarter. The unit reported operating earnings of $6.3 million, higher than the income of $5.1 recorded in the prior-year quarter. The results were supported by 87.9% fall in operating expenses and the streamlining efforts that the partnership executed last year.
Balance Sheet
As of Mar 31, 2018, the partnership’s total debt was $3,726.1 million, representing a debt-to-capitalization ratio of 59.9%.
Guidance
The partnership expects its production from the Permian Basin to be in the range of 360-380 thousand barrels per day (Mbbl/d) in 2018. NuStar witnessed strong interest for the open season it conducted for the Permian Crude System capacity expansion. The partnership anticipates the project to be completed by July-end, which will increase the system’s capacity by 70 Mbbl/d.
The capital spending of 2018 is expected to be in the range of $360-$390 million, which includes 190 million for the Permian Crude System project. $50 million of the spending will be directed towards the Mexican refined market.
The partnership also announced its intention of expanding its South Texas pipeline assets and the terminal located in the Nuevo Laredo, Mexico. The company has plans to address the growing market of refined products in Mexico. The partnership also announced the closing of an acquisition of CHS’ Council Bluffs system, which includes a 227-mile pipeline and 18 storage tanks.
Zacks Rank and Stocks to Consider
San Antonio, TX-based NuStar currently carries a Zacks Rank #3 (Hold).
Investors interested in the Energy sector can opt for some better-ranked stocks in the same space like Nine Energy Service, Inc. (NINE - Free Report) , Oasis Midstream Partners LP and CNOOC Ltd. (CEO - Free Report) . While Nine Energy Service sports a Zacks Rank #1 (Strong Buy), Oasis Midstream and CNOOC carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based Nine Energy Service is an onshore service provider. For 2018, the bottom line is likely to be up 33.4%. In the last reported quarter, the company delivered a positive earnings surprise of 6.3%.
Houston, TX-based Oasis Midstream is an integrated energy partnership. The company’s revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its earnings are expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. The company’s top line for 2018 is anticipated to improve 49% year over year, while its bottom line is expected to increase 82.8%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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NuStar (NS) Q1 Earnings Miss, Sales Beat on Permian Strength
NuStar Energy L.P.’s first-quarter 2018 earnings per limited partner unit of $1.15 per unit missed the Zacks Consensus Estimate of $1.19, due to Pipeline segment income. However, it surged 134.7% year over year from the year-ago earnings of 49 cents per unit, due to contributions from the partnership’s Permian Crude System. Moreover, increased storage rates at the partnership’s several international facilities supported the results.
NuStar’s operating income was $98.5 million, up 1.4% from the prior-year quarter. Moreover, the partnership recorded a net income of $126.1 million in the quarter under review, compared with $57.9 million in the year-ago quarter.
Quarterly revenues of $475.9 million surpassed the Zacks Consensus Estimate of $449 million. However, the top line was slightly lower than the year-ago level of $487.4 million, primarily due to a decline in product sales and other revenues in the Fuels Marketing segment.
Nustar Energy L.P. Price, Consensus and EPS Surprise
Nustar Energy L.P. Price, Consensus and EPS Surprise | Nustar Energy L.P. Quote
Quarterly Distribution
NuStar announced a quarterly distribution of 60 cents per unit ($2.40 per unit annualized), lower than the prior-quarter’s figure of $1.095. The reduced distribution – as part of the impending merger with its general partner –is payable on May 14 to its unitholders of record as of May 8, 2018.
Per NuStar’s latest earnings release, distributable cash flow available to limited partners in the first quarter was $91.7 million (providing 1.64x distribution coverage), compared with $88.9 million (providing 0.87x distribution coverage) in the year-ago quarter.
Segmental Performance
Pipeline: Total quarterly throughput volumes in the segment were 1,323,188 barrels per day (Bbl/d), up 43.4% from the year-ago period. While throughput volumes in the crude oil pipelines jumped 93.6% (owing to higher contribution from Permian crude system) from the year-ago quarter to 791,294 Bbl/d, refined product pipelines throughput inched up 3.5% to 531,894 Bbl/d.
As a result, throughput revenues rose 12.8% year over year to $136.8 million. However, operating and depreciation expenses rose 28% and 58.4%, respectively. Concurrently, the segment’s operating income of $57.8 million was down from the year-ago figure of $65 million.
Storage: Throughput volumes in the Storage segment surged 9.2% year over year to 343,933 Bbl/d. Higher storage terminal revenues, on the back of stronger contribution from Permian Crude System and increased storage rates at several facilities, drove the unit’s quarterly revenues from $147.4 million in the first quarter of 2017 to $155.3 million in the quarter under review. Moreover, the segment's operating income also witnessed a slight increase of 4.7% to come in at $56.3 in the reported quarter.
Fuels Marketing: Product sales and other revenues from this segment fell to $185.8 million from $222.7 million in the year-ago quarter. The unit reported operating earnings of $6.3 million, higher than the income of $5.1 recorded in the prior-year quarter. The results were supported by 87.9% fall in operating expenses and the streamlining efforts that the partnership executed last year.
Balance Sheet
As of Mar 31, 2018, the partnership’s total debt was $3,726.1 million, representing a debt-to-capitalization ratio of 59.9%.
Guidance
The partnership expects its production from the Permian Basin to be in the range of 360-380 thousand barrels per day (Mbbl/d) in 2018. NuStar witnessed strong interest for the open season it conducted for the Permian Crude System capacity expansion. The partnership anticipates the project to be completed by July-end, which will increase the system’s capacity by 70 Mbbl/d.
The capital spending of 2018 is expected to be in the range of $360-$390 million, which includes 190 million for the Permian Crude System project. $50 million of the spending will be directed towards the Mexican refined market.
The partnership also announced its intention of expanding its South Texas pipeline assets and the terminal located in the Nuevo Laredo, Mexico. The company has plans to address the growing market of refined products in Mexico. The partnership also announced the closing of an acquisition of CHS’ Council Bluffs system, which includes a 227-mile pipeline and 18 storage tanks.
Zacks Rank and Stocks to Consider
San Antonio, TX-based NuStar currently carries a Zacks Rank #3 (Hold).
Investors interested in the Energy sector can opt for some better-ranked stocks in the same space like Nine Energy Service, Inc. (NINE - Free Report) , Oasis Midstream Partners LP and CNOOC Ltd. (CEO - Free Report) . While Nine Energy Service sports a Zacks Rank #1 (Strong Buy), Oasis Midstream and CNOOC carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based Nine Energy Service is an onshore service provider. For 2018, the bottom line is likely to be up 33.4%. In the last reported quarter, the company delivered a positive earnings surprise of 6.3%.
Houston, TX-based Oasis Midstream is an integrated energy partnership. The company’s revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its earnings are expected to increase 337.2%.
Hong Kong-based CNOOC is an integrated energy company. The company’s top line for 2018 is anticipated to improve 49% year over year, while its bottom line is expected to increase 82.8%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>