Plains All American (PAA) Lags Q1 Earnings, Revises Outlook
Plains All American Pipeline, L.P. PAA reported first-quarter 2017 adjusted earnings of 27 cents per unit, missing the Zacks Consensus Estimate of 36 cents by 25%.
Quarterly earnings also fell 40% from the year-ago tally of 45 cents. This drop in earnings was due to weaker than anticipated performance from its natural gas liquids (NGL) marketing activities that were negatively impacted by warmer weather and tighter differentials between Canada and US demand markets.
Total Revenue
In the first quarter, the partnership reported total revenue of $6,667 million, which beat the Zacks Consensus Estimate of $5,740 million by 16.1%.
Further, quarterly revenues were up 62.2% from $4,111 million in the year-ago quarter primarily driven by higher contribution from Supply & Logistics (up 67.5%) and Facilities (up 10.6%).
Operational Update
In the quarter under review, Plains All American’s total cost and expenses were $6,076 million, up 58.7% year over year primarily due to higher purchases and related costs, and depreciation and amortization.
The partnership’s operating income increased 109.6% to $591 million from $282 million a year ago.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $512 million in the first quarter, down 19.1%.
Interest expenses increased 15.2% to $129 million from $112 million a year ago.
Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise
Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise | Plains All American Pipeline, L.P. Quote
Financial Update
Current assets as of Mar 31, 2017 were $4,210 million, compared with $4,272 million as of Dec 31, 2016.
As of Mar 31, 2017, Plains All American had long-term debt of $9,879 million, compared with $10,124 million as of Dec 31, 2016. The long-term debt-to-total book capitalization ratio at the end of the quarter was 51%, down from 57% at the end of 2016.
Guidance
Plains All American revised 2017 full-year adjusted EBITDA guidance of $2,260 million from a prior adjusted guidance of $2,360 million.
The partnership revised 2017 expansion capital expenditure projection of $900 million from a prior projection of $800 million and maintenance capital expenditure guidance of $195 million from a prior guidance of $180 million.
Peer Releases
Boardwalk Pipeline Partners L.P. BWP posted first-quarter 2017 earnings from continuing operations of 47 cents per share, beating the Zacks Consensus Estimate of 42 cents.
Enable Midstream Partners, LP ENBL posted first-quarter 2017 earnings from operations of 26 cents per share, beating the Zacks Consensus Estimate of 18 cents.
Cone Midstream Partners LP CNNX posted first-quarter 2017 earnings of 45 cents per share, beating the Zacks Consensus Estimate of 42 cents.
Zacks Rank
Plains All American currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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