NuStar Energy Beats Q4 Earnings on Record Throughput - Analyst Blog
NuStar Energy LP (NS), the San Antonio-based publicly traded partnership, reported strong fourth-quarter results backed by improved performances across its Pipeline and Storage segments.
NuStar’s earnings per unit (EPU) from continuing operations came in at 55 cents, beating the Zacks Consensus Estimate of 53 cents. The bottom line also increased from the year-ago quarter figure of 21 cents per unit.
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However, quarterly revenues of $681.7 million failed to meet the Zacks Consensus Estimate of $793 million and were also below of the year-ago level of $785.4 million. Lower contribution from the Fuels Marketing segment affected the results.
For 2014, NuStar reported adjusted per unit profits of $2.14, ahead of the Zacks Consensus Estimate of $2.10. Furthermore, it marked a substantial improvement from the 2013 earnings of 75 cents. However, revenues of $3,075.1 million fell 11.2% from the prior-year figure.
Quarterly Distribution
NuStar announced quarterly distribution of $1.095 per unit ($4.38 per unit annualized), which remained unchanged from the previous quarter’s distribution. The distribution is payable on Feb 13, 2014, to unitholders on record as of Feb 9.
Distributable cash flow (DCF) available to limited partners for the third quarter was $95.4 million or $1.23 per unit (providing 1.12x distribution coverage) compared with $75.3 million or 97 cents per unit in the year-earlier quarter.
Segmental Performance
Pipeline: Total quarterly throughput volumes in the Pipeline segment were 1,024,490 barrels per day (Bbl/d), up 14.7% from the year-ago period.
Throughput volumes in crude oil pipelines increased about 30% from the year-ago quarter to 490,969 Bbl/d. Moreover, throughput revenues rose 19.2% to $130.8 million. The segment’s operating income was up 12.1% year over year to $66.4 million on an increase in throughput volumes.
Storage: Throughput volumes in the Storage segment rose 13.8% year over year to 918,929 Bbl/d.
Quarterly revenues were up about 7% year over year to approximately $143 million. The segment reported a profit of $41.7 million against a loss of $266.9 million in the year-ago quarter. Higher throughput volumes and revenues led to the improvement.
Fuels Marketing: The unit reported an income of $2.9 million, against the year-ago quarter income of 7.1 million. Lower product sales and higher operating expenses hampered the results.
Balance Sheet
As of Dec 31, 2014, the partnership had a total debt of $2,826.5 million, representing a debt-to-capitalization ratio of 62.2%.
2015 Guidance
NuStar expects first-quarter 2015 operating earnings for its Pipeline and Storage segments to be higher than the profit made a year ago. Moreover, the partnership projected that its Pipeline segment's operating income would be $25–$45 million higher than the 2014 level. The partnership stated that the Storage segment’s operating income is expected to be $10–$30 million higher than last year. Also, operating earnings from the fuels marketing segment is expected between $20 million and $30 million. The partnership anticipates that it would be able to cover its distribution in 2015 as well.
The partnership plans to invest $400–$420 million in organic growth projects in 2015.
Zacks Rank & Other Stock Picks
NuStar currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the same sector include Delek Logistics Partners, LP (DKL), Energy Transfer Equity, L.P. (ETE) and TC PipeLines, LP (TCP). All these stocks hold a Zacks Rank #2 (Buy).
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