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Buckeye Partners (BPL) Down 12.9% Since Earnings Report: Can It Rebound?

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MEET vs. WDAY: Which Stock Should Value Investors Buy Now?

MEET vs. WDAY: Which Stock Is the Better Value Option?

A month has gone by since the last earnings report for Buckeye Partners L.P. BPL. Shares have lost about 12.9% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is BPL due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Buckeye Partners' (BPL) Q1 Earnings Miss, Revenues Beat

Buckeye Partners, L.P. reported first-quarter 2018 earnings of 74 cents per unit, lagging the Zacks Consensus Estimate of 77 cents by 3.9%. Earnings were also lower than the year-ago figure of 88 cents by nearly 15.9%.

Total Revenues

In the quarter under review, Buckeye Partners’ total revenues came in at $1,183.1 million, beating the Zacks Consensus Estimate of $901 million by 31.3%.

Total revenues were up 22.1% year over year, owing to better performance of the Merchant Services and Domestic Pipelines & Terminals segment.

Operational Highlights

In the quarter, the partnership’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations decreased 5.7% from the prior-year quarter to $261.7 million.

Total costs and expenses were $1,013.6 million, up 27.2% from a year ago. The partnership’s operating income was down 1.8% to $169.5 million.

Financial Screening

As of Mar 31, 2018, Buckeye Partners had cash and cash equivalents of $6.6 million compared with $2.1 million as of Dec 31, 2017.

Long-term debt as of Mar 31, 2018 was $4,587.9 million, lower than $4,658.3 million as of Dec 31, 2017.

Total capital expenditure in the first quarter was $116.9 million, up 18.9% from $98.3 million a year ago.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower.

Buckeye Partners L.P. Price and Consensus

Buckeye Partners L.P. Price and Consensus | Buckeye Partners L.P. Quote

VGM Scores

At this time, BPL has a subpar Growth Score of D, however its Momentum is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value investors than momentum investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, BPL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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