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Buckeye Partners L.P. (BPL) Up 25.1% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

It has been about a month since the last earnings report for Buckeye Partners L.P. (BPL). Shares have added about 25.1% in that time frame, outperforming the S&P 500.

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

Buckeye Partners' Q1 Earnings Miss, Revenues Beat

Buckeye Partners, L.P.  reported first-quarter 2019 earnings of 52 cents per unit, lagging the Zacks Consensus Estimate of 59 cents by 11.9%. The bottom line also declined 29.7% year over year.

Total Revenues

In the quarter under review, Buckeye Partners’ total revenues came in at $1,028.9 million, beating the Zacks Consensus Estimate of $1,005 million by 2.4%.

However, the top line lagged the year-ago revenues of $1,183.1 million by 13.1%. The decline was due to lower contribution from all its reportable segments.

Highlights of the Release

Today, Buckeye Partners announced a definitive agreement, under which the IFM Global Infrastructure Fund will acquire all of the outstanding public common units of the firm for $41.50 per common unit.

In the first quarter, the partnership’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations decreased 17.3% from the prior-year level to $216.4 million.

Total costs and expenses were $894.5 million, down 11.8% from the year-earlier figure of $1,013.6 million. Operating income in the reported quarter was $134.2 million, down 20.8% from the year-ago period.

Financial Screening

As of Mar 31, 2019, Buckeye Partners had cash and cash equivalents of $1.5 million compared with $1.8 million on Dec 31, 2018.

Long-term debt as of Mar 31, 2019 was $3,683 million, lower than $4,536.7 million on Dec 31, 2018.

Total capital expenditure in the first quarter was $103.4 million, down 11.5% from $116.9 million invested in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Buckeye Partners L.P. has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Buckeye Partners L.P. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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