NuStar Energy LP (NS) Reports Q3 2023 Earnings: Net Income of $51 Million Despite Challenges
NuStar Energy LP (NYSE:NS) reports net income of $51 million for Q3 2023, despite a $0.07 net loss per unit due to the premium paid for redeeming Series D preferred units.
The company's Pipeline Segment's operating income increased by 14% quarter-over-quarter, while the Fuels Marketing Segment reported near-record earnings.
NuStar's balance sheet strengthened with the successful issuance of common equity and raised $222 million, leading to a credit rating upgrade.
The company maintains a positive outlook for the remainder of 2023.
On November 2, 2023, NuStar Energy LP (NYSE:NS) announced its third-quarter earnings for 2023. Despite facing challenges, the company reported solid results, driven by strong volumes in its refined products pipelines. The company's strategic initiatives and strengthened balance sheet contributed to its performance.
Financial Highlights
NuStar reported a net income of $51 million for Q3 2023, compared to a net income of $60 million for the same period in 2022. The company's earnings per unit were impacted by the premium paid to redeem the remaining 8.3 million Series D preferred units, resulting in a $0.07 net loss per unit. Despite this, the company's EBITDA was not impacted by the premium and reported an EBITDA of $180 million for Q3 2023, up from $178 million in Q3 2022.
Segment Performance
The company's Pipeline Segment generated an operating income of $126 million and EBITDA of $170 million in Q3 2023, compared to an operating income of $110 million and EBITDA of $155 million in Q3 2022. The Storage Segment generated an operating income of $17 million and EBITDA of $36 million in Q3 2023, compared to an operating income of $23 million and EBITDA of $41 million in Q3 2022. The Fuels Marketing Segment reported operating income and EBITDA of $8 million in Q3 2023, comparable to Q3 2022 results.
Strengthened Balance Sheet and Credit Rating Upgrade
In August, NuStar successfully issued common equity and raised $222 million, which was applied toward the redemption of the remaining Series D preferred units. This move significantly strengthened the company's balance sheet and led to a credit rating upgrade by Fitch Ratings and S&P Global.
Outlook for Remainder of 2023
NuStar maintains a positive outlook for the remainder of 2023, with plans to generate full-year net income in the range of $261 to $273 million and full-year adjusted EBITDA in the range of $720 to $740 million. The company also plans to spend $120 to $130 million in strategic capital in 2023.
Conclusion
Despite facing challenges, NuStar Energy LP (NYSE:NS) reported solid earnings for Q3 2023, driven by strong volumes in its refined products pipelines and significant progress on its strategic initiatives. The company's strengthened balance sheet and credit rating upgrade further contribute to its positive outlook for the remainder of 2023.
Explore the complete 8-K earnings release (here) from NuStar Energy LP for further details.
This article first appeared on GuruFocus.
