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Tesoro Logistics Beat Consensus Revenue Estimates in 3Q15

Ruth King

Tesoro Logistics Reports Strong EBITDA Growth in 3Q15

(Continued from Prior Part)

Tesoro Logistics beat 3Q15 revenue estimates

Tesoro Logistics’ (TLLP) revenue of $282 million in 3Q15 was 1.3% higher compared to analysts’ consensus estimates. It has exceeded consensus revenue estimates in all of the last ten quarters. As the following graph shows, just like in 3Q15, the estimates are pretty close to the actual revenue in most of the quarters. Tesoro Logistics’ revenue has shown a consistent rising trend over ten quarters.

Tesoro Logistics’ 3Q15 revenue is 3% higher compared to its revenue for 2Q15. Its 3Q15 revenue grew 88% compared to 3Q14. Tesoro Logistics forms ~0.6% of the Guggenheim Raymond James SB-1 Equity ETF (RYJ).

Factors contributed to 3Q15 revenue growth

The following factors contributed to Tesoro Logistics’ revenue growth in 3Q15:

  • The YoY (year-over-year) revenue growth was driven by contributions from the Rockies natural gas business and organic growth projects on Tesoro Logistics’ North Dakota and Montana pipeline. The Rockies natural gas business includes QEP Midstream Partners and related assets acquired from QEP Resources (QEP) in December 2014 and July 2015.
  • Tesoro Logistics also recorded a 6% quarter-over-quarter rise in crude oil and a 4% quarter-over-quarter rise in natural gas gathering volumes. This drove the revenue growth.
  • The YoY rise in terminaling and transportation revenue can be attributed to higher volumes and contributions from the West Coast Logistics Asset dropdown from Tesoro (TSO). Tesoro Logistics also recorded a 6% quarter-over-quarter rise in terminaling and 5% quarter-over-quarter rise in transportation volumes. This drove the revenue growth.

Logistics subsidiaries Holly Energy Partners (HEP) and Valero Energy Partners (VLP) are scheduled to report their 3Q15 results on November 4, 2015, and October 30, 2015, respectively.

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