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Enterprise Products Partners L.P. (EPD - Free Report) reported third-quarter 2019 adjusted earnings per limited partner unit of 50 cents, which missed the Zacks Consensus Estimate of 53 cents. The bottom line also declined from 51 cents in the year-ago quarter.
Revenues declined to $7,964.1 million from $9,585.9 million in the prior-year quarter. The top line also missed the consensus estimate of $8,225 million.
The weak results stemmed from lower processing margins, increased NGL Pipelines & Services’ operating expenses and lower equity NGL production. This was partially offset by higher natural gas transportation volumes and increased production volumes in the propylene business.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Quarterly distribution improved 2.3% year over year to 44.25 cents per common unit or $1.77 per unit on an annualized basis. Adjusted distributable cash flow was $1.6 billion, up 4.7% year over year and provided coverage of 1.7x.
Segmental Performance
Gross operating income at NGL Pipelines & Services decreased from $1,063.1 million in the year-ago quarter to $1,008.3 million. The downside can be attributed to lower processing margins, increased operating expenses and lower equity NGL production. This was partially offset by a 47% increase in fee-based processing volumes at the Permian Basin plants.
Natural Gas Pipelines and Services’ gross operating income jumped to $258.5 million from $216.9 million in the year-ago quarter. The upside was supported by a record transportation volume of 14.5 trillion British thermal unit of natural gas per day.
Crude Oil Pipelines & Services recorded gross operating income of $496.2 million, falling from $594.2 million in the prior-year quarter, which included higher mark-to-market gains on financial instruments.
Gross operating income at Petrochemical & Refined Products Services amounted to $288.4 million compared with $249.4 million a year ago. The improvement can be primarily attributed to higher gross operating margins and increased production volumes in the propylene business.
Financials
During the quarter, the partnership’s capital expenditure was $1,041.3 million.
As of Sep 30, 2019, outstanding total debt principal of the partnership was $28.2 billion. Enterprise Products’ consolidated liquidity amounted to $6.2 billion, which included unrestricted cash on hand of $1.2 billion and available borrowing capacity.
Outlook
Enterprise Products expects to complete the construction of growth developments worth $2.6 billion through the fourth quarter of 2019.
Zacks Rank and Stocks to Consider
Currently, Enterprise Products has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Pembina Pipeline Corp. (PBA - Free Report) , Matrix Service Company (MTRX - Free Report) and Exterran Corporation . While Pembina sports a Zacks Rank #1 (Strong Buy), Matrix Service and Exterran hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pembina’s 2019 earnings per share are expected to rise 21.5% year over year.
Matrix Service’s 2019 earnings per share are expected to rise 58.4% year over year.
Exterran’s top line for the current year is expected to rise around 5% year over year.
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Enterprise Products' (EPD) Q3 Earnings Miss, Decline Y/Y
Enterprise Products Partners L.P. (EPD - Free Report) reported third-quarter 2019 adjusted earnings per limited partner unit of 50 cents, which missed the Zacks Consensus Estimate of 53 cents. The bottom line also declined from 51 cents in the year-ago quarter.
Revenues declined to $7,964.1 million from $9,585.9 million in the prior-year quarter. The top line also missed the consensus estimate of $8,225 million.
The weak results stemmed from lower processing margins, increased NGL Pipelines & Services’ operating expenses and lower equity NGL production. This was partially offset by higher natural gas transportation volumes and increased production volumes in the propylene business.
Enterprise Products Partners L.P. Price, Consensus and EPS Surprise
Enterprise Products Partners L.P. price-consensus-eps-surprise-chart | Enterprise Products Partners L.P. Quote
Distributable Cash Flow
Quarterly distribution improved 2.3% year over year to 44.25 cents per common unit or $1.77 per unit on an annualized basis. Adjusted distributable cash flow was $1.6 billion, up 4.7% year over year and provided coverage of 1.7x.
Segmental Performance
Gross operating income at NGL Pipelines & Services decreased from $1,063.1 million in the year-ago quarter to $1,008.3 million. The downside can be attributed to lower processing margins, increased operating expenses and lower equity NGL production. This was partially offset by a 47% increase in fee-based processing volumes at the Permian Basin plants.
Natural Gas Pipelines and Services’ gross operating income jumped to $258.5 million from $216.9 million in the year-ago quarter. The upside was supported by a record transportation volume of 14.5 trillion British thermal unit of natural gas per day.
Crude Oil Pipelines & Services recorded gross operating income of $496.2 million, falling from $594.2 million in the prior-year quarter, which included higher mark-to-market gains on financial instruments.
Gross operating income at Petrochemical & Refined Products Services amounted to $288.4 million compared with $249.4 million a year ago. The improvement can be primarily attributed to higher gross operating margins and increased production volumes in the propylene business.
Financials
During the quarter, the partnership’s capital expenditure was $1,041.3 million.
As of Sep 30, 2019, outstanding total debt principal of the partnership was $28.2 billion. Enterprise Products’ consolidated liquidity amounted to $6.2 billion, which included unrestricted cash on hand of $1.2 billion and available borrowing capacity.
Outlook
Enterprise Products expects to complete the construction of growth developments worth $2.6 billion through the fourth quarter of 2019.
Zacks Rank and Stocks to Consider
Currently, Enterprise Products has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Pembina Pipeline Corp. (PBA - Free Report) , Matrix Service Company (MTRX - Free Report) and Exterran Corporation . While Pembina sports a Zacks Rank #1 (Strong Buy), Matrix Service and Exterran hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pembina’s 2019 earnings per share are expected to rise 21.5% year over year.
Matrix Service’s 2019 earnings per share are expected to rise 58.4% year over year.
Exterran’s top line for the current year is expected to rise around 5% year over year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>