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TC PipeLines (TCP) Q1 Earnings Beat, Revenues Miss Estimates

Zacks Equity Research

Pipeline operator TC PipeLines, LP TCP reported first-quarter 2017 earnings per unit of $1.05 surpassing the Zacks Consensus Estimate of 98 cents. Higher transmission revenues led to better-than-expected results. However, the figure deteriorated from $1.10 per unit recorded in the year-ago quarter.

Quarterly transmission revenues of $89 million missed the Zacks Consensus Estimate of $128 million. Nonetheless, the top line improved 3.5% from the year-earlier quarter level of $86 million.   

 

Distribution & Cash Flow

Late last month, TC PipeLines announced first-quarter 2017 cash distribution of 94 cents per unit, up 5.6% year over year. The distribution remained unchanged from the amount paid in fourth-quarter 2016. This cash distribution is the 72nd consecutive quarterly distribution paid by the partnership and is payable on May 15 to unit holders of record at the close of business on May 5.

The partnership's total distributable cash flow declined about 3.1% year over year to $92 million owing to higher maintenance expenses.

TC PipeLines distributed $68 million in the reported quarter as against $60 million in the year-ago quarter.

Pipeline Systems' Performance

Great Lakes: The partnership incurred a loss of $17 million from equity investment, wider than the prior-year quarter loss of $15 million. 

Northern Border Pipeline: Equity loss at this pipeline totaled $19 million, wider than the prior-year quarter loss of $18 million. 

Expenses

The operation and maintenance expenses increased to $12 million in the quarter compared with $10 million in the prior-year quarter. General and administrative charges remained unchanged from the year-ago figure of $2 million. Depreciation costs increased to $22 million in the reported quarter, up 4.7% from the prior-year quarter.

Liquidity

As of Mar 31, 2017, TC PipeLines had cash and cash equivalents of $60 million. The partnership had long-term debt of $1,786 million, representing a debt-to-capitalization ratio of 59.3%.  

TC PipeLines, LP Price, Consensus and EPS Surprise

TC PipeLines, LP Price, Consensus and EPS Surprise | TC PipeLines, LP Quote

Zacks Rank & Key Picks

Calgary, Alberta-based TC PipeLines under Zacks categorized Oil and Gas Production Pipeline-MLP  currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the broader energy space include Bellatrix Exploration Ltd BXE, McDermott International, Inc. MDR and Penn Virginia Corporation PVAC. All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bellatrix reported positive earnings surprise of 58.54% in the trailing four quarters.

McDermott posted positive average earnings surprise of 387.5% in the preceding four quarters.

Penn Virginia posted positive average earnings surprise of 36.67% in the preceding four quarters.

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TC PipeLines, LP (TCP): Free Stock Analysis Report
 
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Penn Virginia Corporation (PVAC): Free Stock Analysis Report
 
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