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TC PipeLines (TCP) Q2 Earnings Miss by a Whisker, Down Y/Y

Zacks Equity Research

After posting positive earnings surprise in the trailing five quarters, TC PipeLines TCP came up with weaker-than-expected results in second-quarter 2019. The firm reported earnings of 75 cents a share, missing the Zacks Consensus Estimate by a penny. Lower earnings from Northern Border and PNGTS pipelines were attributed to the underperformance. The bottom line decreased from $1.00 per unit recorded in the year-ago quarter. 


Quarterly transmission revenues of $93 million compared unfavorably with $111 million recorded in second-quarter 2018 amid lower contribution from Bison Pipelines.

TC PipeLines, LP Price, Consensus and EPS Surprise

TC PipeLines, LP Price, Consensus and EPS Surprise

TC PipeLines, LP price-consensus-eps-surprise-chart | TC PipeLines, LP Quote

Distribution & Cash Flow


TC PipeLines announced second-quarter 2019 cash distribution of 65 cents per unit, in line with first-quarter 2019 and the year-ago figure. Notably, this marks the 81st quarterly distribution paid by the partnership. The distribution is payable on Aug 14, 2019 to its unitholders of record as of Aug 2.


The partnership's distributable cash flow decreased to $70 million in the quarter under review from $101 million in the year-ago period, owing tolower contribution from PNGTS and Northern Border pipelines.


In the reported quarter, TC PipeLines distributed $47 million in cash, in line with the year-ago period.


Pipeline Systems' Performance


Great Lakes: The partnership generated earnings of $14 million from equity investment, lower than the prior-year quarter’s 15 million.


Northern Border Pipeline: Equity earnings at this pipeline totaled $9 million compared with the prior-year level of $12 million.


Iroquois: Equity earnings at this pipeline amounted to $7 million, lower than the prior-year figure of $9 million.




Operation and maintenance expenses were $17 million in the quarter, in line with the year-ago period. General/administrative expenses totaled $2 million compared with the year-ago figure of $1 million. Property taxes came in at $6 million, lower than the year-ago level of $7 million. Depreciation costs declined to $19 million from $24 million in the year-ago period. Financial and other charges in the quarter also reduced to $21 million from $23 million in the corresponding period of 2018.


Balance Sheet


As of Jun 30, TC PipeLines had cash and cash equivalents of $45 million. The partnership had a long-term debt of $1,892 million, representing a debt-to-capital ratio of 72.4%.


Zacks Rank and Other Stocks to Consider


TC PipeLines currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same industry include NuStar Energy NS, Delek Logistics Partners DKL and BP Midstream Partners BPMP. While NuStar sports a Zacks Rank #1 (Strong Buy), Delek Logistics and BP Midstream are Zacks Ranked #2 players. You can see the complete list of today’s Zacks #1 Rank stocks here.


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