Buckeye Partners Misses Q2 Earnings Estimates, Revenues Jump

Zacks

Buckeye Partners, L.P. (BPL) reported second-quarter 2014 earnings from continuing operations of 53 cents per unit, missing the Zacks Consensus Estimate of 84 cents by 36.9%. On a year-over-year basis, quarterly earnings decreased 33.8% primarily due to an increase in units outstanding and higher total costs and expenses.

Total Revenue

In the quarter under review, Buckeye Partners’ total revenues were $1,809 million, surpassing the Zacks Consensus Estimate of $1,442 million by 25.5%. Reported top line surged 82.1% from the prior-year figure.

Total revenues improved mainly on the back of increased contribution from Buckeye Partners’ Merchant Services (up 103.1% year over year), Global Marine Terminals (up 41.5%), Development & Logistics (up 37.3%) and Pipeline and Terminals (up 18.4%)  segments.

Operational Highlights

In the second quarter, Buckeye Partners’ adjusted earnings before interest, taxes, depreciation, and amortization (:EBITDA) from continuing operations edged down around 2% year over year to $150.8 million.

Total costs and expenses in the reported quarter were $1,706.8 million, up 94% year over year primarily due to higher cost of product sales and operating expenses.

The partnership’s operating income decreased 10.4% to $102.2 million from $114 million a year ago.

Interest and debt expenses during the quarter increased 38.9% year over year to $42 million, primarily due to a higher debt level.

Financial Screening

As of Jun 30, 2014, Buckeye Partners had cash and cash equivalents of $21.9 million versus $5.0 million as of Dec 31, 2013.

Long-term debt, as of Jun 30, 2014, was $3,309.3 million compared with $3,092.7 million as of Dec 31, 2013.

During the quarter, Buckeye Partners spent $17.2 million as maintenance capital expenditures, up 31.8% from the prior-year period.

Business Update

During the second quarter of 2014, Buckeye Partners’ new Perth Amboy pipeline connection commenced operations.

The partnership has announced that it will pay a cash distribution for second-quarter 2014 of $1.1125 per limited partner unit, up around 5% from the prior-year payout. The revised cash distribution will be paid on Aug 25, 2014 to unitholders of record as of Aug 18.

Other Earnings Releases

Enterprise Products Partners L.P. (EPD) announced second-quarter 2014 earnings of 67 cents per unit, missing the Zacks Consensus Estimate by 8.2%.

ONEOK Partners, L.P. (OKS) reported second-quarter 2014 earnings of 54 cents per unit, missing the Zacks Consensus Estimate of 66 cents by 18.2%.

Plains All American Pipeline, L.P. (PAA) reported second-quarter 2014 adjusted earnings of 49 cents per unit, surpassing the Zacks Consensus Estimate of 46 cents by 6.5%.

Zacks Rank

Buckeye Partners currently carries a Zacks Rank #3 (Hold).

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