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Why Is Buckeye Partners L.P. (BPL) Down 1.6% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Buckeye Partners L.P. (BPL). Shares have lost about 1.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Buckeye Partners L.P. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Buckeye Partners' Q2 Earnings Beat, Revenues Miss

Buckeye Partners, L.P. reported second-quarter 2019 earnings of 58 cents per unit, beating the Zacks Consensus Estimate of 55 cents by 5.4%. However, the bottom line declined by a penny from the year-ago quarter.

Total Revenues

In the quarter under review, Buckeye Partners’ total revenues came in at $791.7 million, lagging the Zacks Consensus Estimate of $1,007 million by 21.4%.

The top line also declined 15.8% from the year-ago revenues of $940.8 million. The decline was due to lower contribution from all its reportable segments.

Highlights of the Release

In the second quarter, the partnership’s adjusted earnings before interest, taxes, depreciation and amortization from continuing operations decreased 15.9% from the prior-year level to $214.3 million.

Total costs and expenses were $654.1 million, down 17.7% from the year-earlier figure of $795.1 million. Operating income in the reported quarter was $137.6 million, down 5.6% from the year-ago period.

Financial Screening

As of Jun 30, 2019, Buckeye Partners had cash and cash equivalents of $6.2 million compared with $1.8 million on Dec 31, 2018.

Long-term debt as of Jun 30, 2019 was $3,730 million, lower than $4,536.7 million on Dec 31, 2018.

Total capital expenditure in the first half of 2019 was $191.2 million, down 23.5% from $250 million invested in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Buckeye Partners L.P. has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Buckeye Partners L.P. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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