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Buckeye Partners L.P. (BPL) Down 12.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Buckeye Partners L.P. (BPL). Shares have lost about 12.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Buckeye Partners L.P. due for a breakout? 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 Q3 Earnings & Revenues Lag Estimates

Buckeye Partners, L.P. reported third-quarter 2018 earnings of 57 cents per unit, lagging the Zacks Consensus Estimate of 68 cents by 16.2%. Moreover, the bottom line was down year over year by 29.6%.

Total Revenues

In the quarter under review, Buckeye Partners’ total revenues came in at $909.6 million, missing the Zacks Consensus Estimate of $920 million by 1.1%.

Moreover, the top line slipped 1.4% year over year due to lower revenues from transportation, storage and other services.

Operational Highlights

In the third quarter, the partnership’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations decreased 8.5% from the prior-year quarter’s level to $253.7 million.

Total costs and expenses were $1,301.4 million, up 72.5% from the year-earlier number. The firm’s reported operating loss of $391.8 million came in against the operating income of $168.3 million in the year-ago quarter.

Financial Screening

As of Sep 30, 2018, Buckeye Partners had cash and cash equivalents of $0.7 million compared with $2.2 million as of Dec 31, 2017.

Long-term debt as of Sep 30, 2018 was $4,985.2 million, higher than $4,658.3 million as of Dec 31, 2017.

Total capital expenditure in the third quarter was $107 million, up 6.2% from $100.7 million a year ago.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.41% due to these changes.

VGM Scores

Currently, Buckeye Partners L.P. has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Buckeye Partners L.P. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.



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