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Plains All American (PAA) Q3 Earnings Miss, Revenues Beat

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·4 min read
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  • PAA
  • MMP

Plains All American Pipeline, L.P. PAA reported third-quarter 2021 adjusted earnings of 22 cents per unit, which lagged the Zacks Consensus Estimate by a penny. The bottom line also declined 52% from the year-ago figure.

For the quarter under review, the partnership reported GAAP loss of 15 cents per unit against earnings of 13 cents in the year-ago period.

Total Revenues

Total revenues of $10,776 million surpassed the Zacks Consensus Estimate of $9,282 million by 16.1%. Further, the top line improved 84.8% from $5,833 million reported a year ago.

Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise

Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise
Plains All American Pipeline, L.P. Price, Consensus and EPS Surprise

Plains All American Pipeline, L.P. price-consensus-eps-surprise-chart | Plains All American Pipeline, L.P. Quote

Highlights of the Release

For the quarter under review, Plains All American’s total costs and expenses were $10,814 million, up 93.8% year over year. This increase was owing to higher purchases and related costs.

Total adjusted EBITDA for the quarter was $519 million, up 23.9% from the year-ago period.

During the quarter, the Transportation segment’s volumes were 6,893 thousand barrels per day (Mbls/d), up 8.7% from 6,340 Mbls/d in the prior-year period. The Supply and Logistics segment’s volumes were 1,369 Mbls/d, up 3.9% from 1,318 Mbls/d in the prior-year period.

Net interest expenses decreased 6.2% year over year to $106 million.

The firm lowered its debt level by $650 million during the quarter and by nearly $1 billion from year-end 2020, which will lower capital servicing costs.

The firm completed the formation of Plains Oryx Permian Basin strategic joint venture and targets JV synergies of $50-$100 million or more.

Segmental Performance

In the Transportation segment, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $427 million decreased 4% from the year-ago figure, primarily due to lower tariffs on certain long-haul volumes, partially offset by an overall increase in tariff volumes.

In the Facilities segment, adjusted EBITDA summed $114 million, down 35% from the year-ago figure. This fall was primarily due to the impact of asset sales and reduced NGL intersegment fee structure based on market conditions.

The Supply and Logistics segment reported adjusted EBITDA of ($23) million against $61 million in third-quarter 2020. The decline was due to contango margins realized in third-quarter 2020, partially offset by reduced NGL intersegment fees.

Financial Update

As of Sep 30, 2021, current assets were $4,847 million compared with $3,665 million at 2020-end.

As of Sep 30, 2021, Plains All American had long-term debt of $8,388 million compared with $9,382 million on Dec 31, 2020. Free cash flow was $1,093 million compared with $73 million in the year-ago period.

As of the same date, its long-term debt-to-total book capitalization was 47%, down from 49% at 2020-end.

Guidance

Plains All American’s 2021 adjusted EBITDA expectation is $2,175 million.

It expects average daily volumes in the Transportation, and Supply and Logistics segments to be 6,250 Mbls/d and 1,475 Mbls/d, respectively.

Zacks Rank

Plains All American currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Enterprise Products Partners L.P. EPD reported third-quarter 2021 adjusted earnings of 52 cents, on par with the Zacks Consensus Estimate.

Enable Midstream Partners, LP ENBL reported third-quarter 2021 adjusted earnings of 24 cents, which increased 100% from the year-ago figure.

Magellan Midstream Partners, L.P. MMP reported third-quarter 2021 adjusted earnings of $1.09, which surpassed the Zacks Consensus Estimate of 96 cents by 13.5%.


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