Back to top

Analyst Blog

Natural gas pipeline operator, Energy Transfer Partners LP (ETP - Analyst Report), announced lower-than-expected third-quarter 2013 earnings. The unfavorable results were accountable to a significant upsurge in operating expenses.

ETP reported a profit from continuing operations of 51 cents per limited partner unit, falling behind the Zacks Consensus Estimate of 60 cents.  

However, the figure increased 96.2% year over year from 26 cents. Substantial improvement in transportation margin along with processing and fractionation margin aided the results.

Quarterly revenues of $11,902.0 million surpassed the Zacks Consensus Estimate of $11,480.0 million. Moreover, comparing year over year, sales witnessed a whopping increase of 560.5% as compared to $1,802.0 million posted in third-quarter 2012. Production hike in Eagle Ford Shale along with increased transportation volumes of natural gas liquid (NGL) led to the improvement.

Quarterly Cash Distribution

Last month, ETP announced third-quarter distribution of 90.5 cents per unit ($3.62 per unit annualized), representing a sequential increase of 1.3%. The distribution is payable on Nov 14, 2013, to the unitholders of record as of Nov 4, 2013.

EBITDA & Operating Income

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter were $942.0 million compared with $660.0 million in the year-ago quarter. The figure reflects significant performance from the NGL transportation and services business unit along with favorable outcome from investments in Sunoco Logistics Partners LP (SXL - Analyst Report).

Operating income of $526.0 million was up 44.1% from the third quarter of 2012.

Operating Expense

ETP reported operating cost of $331.0 million for the third quarter of 2013, reflecting a significant year-over-year increase of 98.2%.

Distributable Cash Flow

ETP reported distributable cash flow of $527.0 million, up from $378 .0 million in the prior-year quarter.

Capital Expenditure

Maintenance capital expenditure totaled $62.0 million, down 10.1% year over year.

Balance Sheet

As of Sep 30, 2013, ETP had long-term debt (less current maturities) of $16,352.0 million. The debt-to-capitalization ratio was 49.1%.

Zacks Rank

ETP currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at oil and gas production pipeline master limited partnerships (MLP) like Pioneer Southwest Energy Partners LP and Magellan Midstream Partners LP (MMP - Analyst Report) that offer better prospects. Pioneer Southwest Energy sports a Zacks Rank #1 (Strong Buy) while Magellan Midstream retains a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
CENTURY ALU… CENX 19.88 +5.74%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
THE PANTRY… PTRY 18.41 +2.79%