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Plains All American (PAA) Q3 Earnings Beat Mark, Revenues Lag

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Plains All American Pipeline, L.P. PAA reported third-quarter 2020 adjusted net income of 46 cents per unit, which outpaced the Zacks Consensus Estimate of 32 cents by 43.8%. However, the bottom line declined 12% from the year-ago quarter’s figure.

In the quarter under review, the partnership reported GAAP net income of 13 cents per unit, down 76% from 55 cents earned in the year-ago quarter.

Total Revenues

Total revenues of $5.8 billion missed the Zacks Consensus Estimate of $5.9 billion by 1.4%. Further, the top line dropped 26.6% from $7.9 billion 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

In the quarter under review, Plains All American’s total costs and expenses were $5,580 million, down 24.5% year over year. This reduction was owing to lower purchases and related costs, field operating costs as well as general and administrative expenses.  The firm’s operating income dropped to $253 million from $492 million in the prior-year quarter.

Total adjusted EBTIDA (Non-GAAP) for the quarter was $682 million, down 7% from the year-ago quarter.

Interest expenses increased 4.6% year over year to $113 million.

Segmental Performance

In the Transportation segment, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $444 million decreased 3.9% from the year-ago quarter’s figure, primarily due to contracted tariff volumes in multiple regions caused by soft crude oil prices, reduced drilling and completion activity and compressed regional basis differentials.

In the Facilities segment, adjusted EBITDA summed $176 million, up 1.7% from the year-ago quarter’s reported figure. This uptrend was primarily driven by operational cost savings and an expanded capacity at certain Mid-Continent and Gulf Coast crude oil storage terminals.

The Supply and Logistics segment reported adjusted EBITDA of $61 million, which tumbled 33.7% from the year-ago quarter’s figure of $92 million. This downtrend was primarily caused by less favorable crude oil differentials in both Permian Basin and Canada.

Financial Update

As of Sep 30, 2020, current assets were $3,405 million compared with $4,612 million at2019 end.

As of Sep 30, 2020, Plains All American had a long-term debt of $9,381 million compared with $9,187 million on Dec 31, 2019.

As of the same date, its long-term debt-to-total book capitalization was 49%, up from 41% at the end of 2019.

Guidance

Plains All American raised its 2020 adjusted net income expectation to $1.59 per unit from its previous estimate of $1.49. The partnership also lifted its 2020 adjusted EBITDA expectation by 3% to $2,585 million. Further, it provided an estimate for 2021 adjusted EBITDA of $2.2 billion.

Plains All American expects its 2020 expansion capital spending to be $950 million.

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

ONEOK Inc OKE posted third-quarter 2020 operating earnings of 70 cents per share, beating the Zacks Consensus Estimate of 59 cents by 18.6%.

CNX Resources Corporation CNX reported third-quarter 2020 adjusted earnings of 4 cents per share, which surpassed the Zacks Consensus Estimate of 2 cents by a whopping 100%.

Devon Energy Corp. DVN reported third-quarter 2020 adjusted loss per share of 4 cents, narrower than the Zacks Consensus Estimate of a loss of 8 cents.

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Plains All American Pipeline, L.P. (PAA) : Free Stock Analysis Report
 
ONEOK, Inc. (OKE) : Free Stock Analysis Report
 
CNX Resources Corporation. (CNX) : Free Stock Analysis Report
 
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