Plains Beats Zacks Estimates – Analyst Blog

Plains All American Pipeline L.P. (PAA) reported adjusted earnings of 77 cents per unit, beating the Zacks Consensus Estimate of 73 cents and in line with the company’s guidance. However, results in the quarter were below last year’s earnings of $1.02 per share.

 

Plains All American reported a 15% increase in adjusted earnings at the Transportation segment in the quarter due to higher average pipeline tariffs and increased pipeline loss allowance revenue. The Facilities segment income increased 30%, driven by capacity increases from recently completed expansion projects and acquisitions. The income at the Supply & Logistics segment decreased 26% due to lower LPG margins and less favorable crude oil differentials.

 

Revenue in the quarter increased 85% to $6.1 billion. In the first quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was at par with the prior-year quarter at $272 million.

 

At quarter end, the partnership’s balance sheet was strong, with roughly $1.1 billion of available liquidity. This solid financial position was further enhanced by the completion of the PNG IPO transaction. Following the IPO, Plains All American’s consolidated liquidity as of March 31, 2010, increased to approximately $1.7 billion.

 

Plains had approximately 136.1 million units outstanding, a long-term debt of $4.1 billion and an adjusted long-term debt-to-total capitalization ratio of 48%.

 

The partnership declared a quarterly distribution of 93.5 cents per unit ($3.74 per unit on an annualized basis) payable May 14, 2010. This distribution represents an increase of approximately 3.3% over the quarterly distribution paid in May 2009 and an increase of approximately 0.8% from the February 2010 distribution level.

 

Looking at the second quarter, the company expects to earn 47 cents per barrel, down 6% from the first quarter, with volumes rising to 2.9 million barrels per day at its Transportation segment. The volume increase is primarily associated with the acquisition of an additional interest in Capline. The Facilities segment guidance assumes a total capacity of 70 million barrels of oil equivalent, an increase of about 4 million barrels over the capacity of the first quarter. Segment profit is projected to be 31 cents per barrel, in line with the first quarter results.

 

For the second quarter, Supply & Logistics segment volumes are expected to be roughly 800,000 barrels per day, down 48,000 barrels per day from the first quarter due to a seasonal decrease in LPG sales volumes. Segment profit is estimated to be 64 cents per barrel, a decline from the first quarter.