Magellan (MMP) Q4 Earnings Miss but Achieves Record DCF
An Earnings Miss: Pipeline operator Magellan Midstream Partners L.P. MMP reported adjusted earnings per unit of $1.04, lower than the Zacks Consensus Estimate of $1.12. Weak contribution from the Marine Storage operating segment led to the miss.
Estimate Revision Trend: Investors should note that the earnings estimates for Magellan Midstream moved up prior to the earnings release. The Zacks Consensus Estimate rose 1% over the last 7 days.
Revenue Outperformance: Magellan Midstream reported revenues of $673.3 million, above the Zacks Consensus Estimate of $663 million.
Zacks Rank & Surprise History: Currently, Magellan Midstream carries a Zacks Rank #3 (Hold), which is subject to change following the earnings announcement.
(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)
Coming to earnings surprise history, the company has a good record: its beaten estimates in three of the last four quarters resulting in an average positive surprise of 3.62%.
Magellan Midstream Partners L.P. Price and EPS Surprise
Magellan Midstream Partners L.P. Price and EPS Surprise | Magellan Midstream Partners L.P. Quote
Key Stats: Operating margin from the Refined Products segment was $216.2 million compared with $191.4 million in the year-ago quarter.
Magellan Midstream’s Crude Oil unit generated $141.8 million of operating margin in the quarter compared to $111.8 million for the same period in 2016.
For the Marine Storage division, operating margin was $26.1 million, 25.7% lower than the $35.1 million earned in the year-ago period.
Magellan Midstream reported that its distributable cash flow (DCF) for fourth-quarter 2017 came in at a record $308.3 million, up 11.2% from the year-ago quarter.
2018 Guidance: Management expects to generate record distributable cash flows of approximately $1,050 million for the full year and is targeting annual distribution growth of 8%. Magellan guided towards first-quarter and full-year earnings per unit of 95 cents and $4.00, respectively.
The partnership plans to spend approximately $900 million on expansion projects in 2018, with expenditures of $375 million thereafter required to complete these projects. Additionally, the partnership continues to look out for more than $500 million of potential organic growth projects in the earlier stages of development.
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