Plains All American (PAA) Q3 Earnings and Revenues Beat

Plains All American Pipeline, L.P. PAA delivered third-quarter 2018 adjusted earnings of 43 cents per unit, beating the Zacks Consensus Estimate of 37 cents by 16.2%. Moreover, the bottom line soared 104.8% from 21 cents in the year-ago period.

In the quarter under review, the partnership reported GAAP earnings of 30 cents, in line with the year-earlier quarter’s figure.

Total Revenues

In the third quarter, the firm’s total revenues grossed $8,792 million, surpassing the Zacks Consensus Estimate of $8,227 million by 6.9%.

Quarterly revenues surged 49.7% from $5,873 million in the prior-year period.

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. Quote

Segment Performance

In the Transportation segment, adjusted EBITDA of $388 million increased 6.9% from the year-ago quarter’s tally, courtesy of an expanded volume in Permian Basin systems coupled with benefits from the Diamond pipeline, which came online in late 2017. However, this upside was offset by the sale of assets in the Rocky Mountain and Central regions.

In the Facilities segment, adjusted EBITDA of $173 million declined 5% from the figure, registered a year ago. This downside was caused by the impact of asset sales.

The company reported adjusted EBITDA of $75 million in the Supply and Logistics segment against a loss of $56 million in the comparable period last year. This was primarily driven by favorable regional crude oil differentials, higher lease gathering margins and volumes plus benefits arising from an audit recovery in NGL businesses.

Highlights of the Release

In the quarter under review, Plains All American’s total cost and expenses were $8,299 million, up 42.4% year over year from $5,829 million. This increase can be primarily attributed to increase in purchases and related costs coupled with field operating cost. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $636 million, surging 30.1% year over year.

Interest expenses declined 17.9% year over year to $110 million.

The partnership’s operating income grew significantly to $493 million from $44 million in the prior-year quarter.

Financial Update

As of Sep 30, 2018, current assets were $4,127 million compared with $4,000 million as of Dec 31, 2017.

As of Sep 30, 2018, Plains All American had long-term debt of $9,140 million compared with $9,183 million as of Dec 31, 2017. The total long-term debt-to-total book capitalization ratio was 45%, down from 46% at the end of 2017.

Guidance

Plains All American raised its full-year 2018 adjusted EBITDA outlook to $2,550 million.

Expected adjusted EBITDA in the Transportation, Facilities and Supply & Logistics segment is $1,510 million, $690 million and $350 million, respectively.

The firm expects its capital expenditure to be $1,950 million, up from $1,135 million invested in 2017.

Zacks Rank

Plains All American carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Oil & Energy Releases

TC PipeLines, LP TCP is expected to report third-quarter 2018 earnings on Nov 9. It has an Earnings ESP of +13.29% and a Zacks Rank of 1.

Penn Virginia Corporation PVAC has an Earnings ESP of +6.38% and a Zacks Rank #2 (Buy). It is slated to report third-quarter 2018 earnings on Nov 14.

Helmerich & Payne, Inc. HP has an Earnings ESP of +8.92% and a Zacks Rank of 2. The company is scheduled to report fourth-quarter fiscal 2018 earnings on Nov 16.

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