BIP Beats Earnings Estimates


Brookfield Infrastructure Partners L.P. (BIP) announced third-quarter 2013 earnings of 80 cents per unit, 5.3% higher than the Zacks Consensus Estimate of 76 cents. The bottom line was much higher than the year-ago earnings of 58 cents.

The year-over-year improvement was due to organic growth in most of its businesses, plus incremental earnings from its transport and utilities businesses.

Total Revenue

Total revenues at the end of the third quarter were $431 million, up 15.3% from the prior-year quarter.

Operational Update

The partnership’s direct operating costs during the quarter were $187 million, decreasing 1.6% from the comparable prior-year period.  However, general & administrative expenses increased 12% year over year to $28 million.

Adjusted EBITDA in the reported quarter was $272 million, up 38.1% from the prior-year quarter.

Interest expenses in the reported quarter increased 16% year over year to $87 million.

Financial Update

The partnership exited the quarter with a strong cash balance. Cash & cash equivalents as of Sep 30, 2013, were $280 million, higher than $263 million as of Dec 31, 2012.

Cash from operating activities at the end of the third quarter was $189 million versus $152 million recorded in the year-ago quarter.

During the quarter the partnership invested $550 million to increase its ownership in South American toll roads and enhance its district energy platform by acquiring two systems in Houston and New Orleans.

Other Company Releases

NiSource Inc. (NI) reported earnings of 18 cents per share in the third quarter, in line with the Zacks Consensus Estimate.

Edison International (EIX) announced third quarter 2013 operating earnings of $1.46 per share, 20.7% higher than the Zacks Consensus Estimate of $1.21.

American Electric Power Co., Inc. (AEP) reported third quarter 2013 pro forma earnings of $1.10 per share, surpassing the Zacks Consensus Estimate of $1.08 by 1.85%.

Our View

Brookfield Infrastructure Partners continues to report strong earnings results, thereby maintaining its surprise streak.

The partnership continues to strategically acquire and/or divest assets. Brookfield Infrastructure Partners’ decision to invest more in Brazilian toll roads and enhance its infrastructure logistics business in South America are appreciable, given the expected spurt in activities for the upcoming World Cup and Olympics in Brazil.

Brookfield Infrastructure Partners owns and operates infrastructural assets on a global scale. The high quality, long life assets allow the partnership to generate consistent cash flow. The partnership currently retains a Zacks Rank #2 (Buy).

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