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Phillips 66 Partners LP (PSXP) Up 0.8% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

It has been about a month since the last earnings report for Phillips 66 Partners LP (PSXP). Shares have added about 0.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Phillips 66 Partners LP 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.

Phillips 66 Partners' Q2 Earnings & Revenues Beat, Up Y/Y

Phillips 66 Partners LP’s second-quarter 2019 earnings per unit came in at $1.15, beating the Zacks Consensus Estimate of $1.13 and also the year-ago bottom-line figure of 94 cents.

Revenues of $401 million rose from $354 million in the year-ago quarter and also beat the Zacks Consensus Estimate of $399 million.

The strong quarterly results were attributed to higher volumes of liquids being transported and stored, driven by the midstream energy player’s joint venture assets comprising Explorer pipeline, Bayou Bridge and Bakken. The surge in refinery utilizations by the firm’s parent company, Phillips 66, also supported the outperformances.

Operating Information

The partnership provides services through Pipelines, Terminals and Storage, Processing & Other activities.

Pipeline: In second-quarter 2019, the partnership generated revenues of $117 million from pipeline transportation business, up from $111 million a year ago. Higher transported volumes of refined petroleum products and natural gas liquid (NGL) primarily led to the improvement.

Terminals: The partnership generated $39 million from terminals, a slight improvement from $38 million a year ago, thanks to higher throughput volumes of refined petroleum products.

Storage, Processing & Other activities: Through these activities, the partnership generated revenues of $107 million, up from $105 million in the year-ago quarter.

Operating and Maintenance Expenses

In the June quarter of 2019, the company reported operating and maintenance expenses of $85 million which was same as it was reported in the year-ago period.

Balance Sheet

As of Jun 30, 2019, the partnership recorded cash and cash equivalents of $130 million which shows a drastic improvement from the prior quarter result of $2 million. Also, the total debt at the end of the quarter reviewed is $3,324 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Phillips 66 Partners LP has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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. Notably, Phillips 66 Partners LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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