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Enterprise Products Partners L.P. Message Board

  • ferdiefor ferdiefor Aug 1, 2012 9:26 AM Flag

    Why is it?

    If you make more money on less revenue that it is automatically considered bad?

    I am a CPA and have often seen circumstances where chasing marginal revenues to meet Wall Street's expectations comes at much lower profit margins that it is not worth chasing revenues.

    I know there are circumstances where lower revenues can be a definite negative but this knee-jerk by Wall Street is unseemly IMO.

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    • ferdie -

      Agree 100% I think the problem is that revenue is generally thought of as sales a la JC Penny or other retail businesses. They do not consider when a company sells a commodity that moves up or down in price.

      The companies that mine silver got great raves the quarters in 1980 or so when silver was close to 50 oz. but were panned when prices moved to a more normal area. I guess we need $5 a gallon gas, $120bbl NGLs etc to have things good.

      The quarter was definately not a blowout quarter. The numbers were solid and consistent with the 1.4X coverage EPD stated as its goal some years back. I actually would have thought we would have had a bit more, but NGL prices certainly were poor.


      • 2 Replies to arbtrdr
      • Not quite sure what constitutes a blowout qtr is but, they had a near 40% increase in Net Income over the 6 mos and near20% increase in EBITDA. This for the largest MLP.

      • My guess is that both Ferdie and Arb know much more about the MLP space than the authors of these financial blogs know. Materials published relentlessly by the Motly Fools and Seeking Alpha are poorly researched and written by really uninformed people. I pay no attention to them at all. Much better information is available on the IV board and in your own mind if you have invested in the MLP's for a while. Analysts offer a mixed bag. One never knows what their, or the brokerage they work for, motives are.

    • My view is to hear what management says about both the profit increase and revenue decrease.

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