Energy Transfer Lags on Earnings, Rises Y/Y

Energy Transfer Equity L.P. (ETE) posted earnings from continuing operations of 52 cents per limited partner unit, which fell short of the Zacks Consensus Estimate of 63 cents. However, the results improved considerably from the year-ago profit of 23 cents.

Revenues increased substantially to $12,486.0 million in the reported quarter from $2,104.0 million a year ago. Revenues surpassed the Zacks Consensus Estimate of $11,855.0 million.

Importantly, quarterly cash distribution per common unit was raised to 67.25 cents ($2.69 annualized), representing a year-over-year increase of 7 cents. The distribution is payable on Nov 19, 2013 to unitholders of record as of Nov 4. Including this hike, the partnership has increased the quarterly distribution four times in a row.

The partnership’s distributable cash flow –– a measure of its ability to return cash to unitholders –– before certain items was $176.0 million versus $189.0 million in the comparable quarter last year.

Costs & Income

Total costs and expenses stood at $11,957.0 million versus $1,745.0 million in the third quarter 2012. Operating income also improved 47.4% year over year to $529.0 million.

The partnership’s net income attributable to partners was $151 million, a sharp jump from $35 million in the comparable period last year.

Balance Sheet

As of Sep 30, 2013, Energy Transfer had long-term debt (less current maturities) of $22,011.0 million. The debt-to-capitalization ratio was 56.1%.

At the Peer

Plains All American Pipeline, L.P. (PAA) announced third-quarter 2013 operating earnings of 50 cents per unit, beating the Zacks Consensus Estimate of 44 cents by 13.6%. However, earnings were lower than 73 cents reported in the year-ago quarter.

Zacks Rank

Energy Transfer currently holds a Zacks Rank #2 (Buy). Meanwhile, one can look at other oil and pipeline master limited partnerships (MLP) like Pioneer Southwest Energy Partners L.P. (PSE) and Magellan Midstream Partners LP (MMP) that offer value. Pioneer Southwest holds a Zacks Rank #1 (Strong Buy), while Magellan Midstream carries a Zacks Rank #2 (Buy).

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