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NuStar's (NS) Q4 Earnings Lag Estimates, Sales & DCF Up Y/Y
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NuStar Energy L.P. (NS - Free Report) reported fourth-quarter 2018 adjusted earnings per limited partner unit of 9 cents, missing the Zacks Consensus Estimate of 16 cents due to an increase in storage operating costs. However, its bottom line was higher than the year-ago quarter’s breakeven earnings per unit, given a boost from Pipeline and Fuels Marketing segments.
NuStar’s operating income was $90 million, up 21.5% from the prior-year quarter. The partnership recorded a net income of $2.1 million in the quarter under review compared with $25.2 million in the year-ago period.
Quarterly revenues of $509.3 million beat the Zacks Consensus Estimate of $464 million and the year-ago level of $450.8 million. The outperformance can be attributed to the increased throughput volumes, backed by higher contribution from the Permian crude system.
NuStar Energy L.P. Price, Consensus and EPS Surprise
Per NuStar’s latest earnings release, distributable cash flow (DCF) available to limited partners was $91.3 million (providing 1.42x distribution coverage), significantly higher than $41.7 million (providing 0.41x distribution coverage) in the year-ago quarter.
Segmental Performance
Pipeline: Total quarterly throughput volumes in the segment were 1,521,814 barrels per day (Bbl/d), up 29.3% from the year-ago period. While throughput volumes in crude oil pipelines jumped 40.5% (owing to higher contribution from the Permian crude system) from the year-ago quarter to 959,041 Bbl/d, throughput from refined product pipelines inched up from 494,354 Bbl/d in the year-ago period to 562,773 Bbl/d.
As a result, throughput and other revenues rose 23.1% year over year to $161.2 million. Concurrently, the segment’s operating income of $74.9 million was up from the year-ago figure of $52.8 million.
Storage: Throughput volumes in the Storage segment rose marginally on a year-over-year basis to 354,567 Bbl/d from 353,617 Bbl/d. The unit’s quarterly revenues fell to $139 million from $152.9 in the prior-year period, due to a plunge in storage terminal revenues (from 130.9 million in fourth-quarter 2017 to $117.2 million in forth-quarter 2018).
Moreover, operating costs recorded an increase from the year-ago quarter. As a result, the segment's operating income decreased 31.3% from a year ago to $34.6 in the reported quarter.
Fuels Marketing: Product sales and other revenues from this segment increased to $210.9 million from $168.8 million in the year-ago quarter. Operating costs rose 29% year over year to $4.6 million. Income from the segment came in at $13.3 million, higher than the year-ago period’s $2.1 million.
Balance Sheet
As of Dec 31, 2018, the partnership’s total debt was $3,130.5 million, representing a debt-to-capitalization ratio of 52.6%.
Guidance
For 2019, the company is expected to have a debt coverage ratio of 4.3 compared to 4.05 in 2018.
Zacks Rank and Stocks to Consider
Currently, NuStar has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below.
Houston, TX-based Shell Midstream Partners, L.P. is a midstream energy company. For 2019, its bottom line, which has witnessed three upside revisions over the past 60 days, is expected to grow 27.7% year over year. The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Houston, TX-based Phillips 66 Partners LP is an oil and gas midstream company. Its bottom line for 2018 is expected to increase more than 56% year over year. It delivered average positive earnings surprise of more than 6% in the trailing four quarters. The stock currently has a Zacks Rank #2.
YPF Sociedad Anonima (YPF - Free Report) is a Buenos Aires, Argentina-based integrated energy company. Its bottom line for 2018 is expected to increase more than 27% year over year. The company currently has a Zacks Rank #2.
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NuStar's (NS) Q4 Earnings Lag Estimates, Sales & DCF Up Y/Y
NuStar Energy L.P. (NS - Free Report) reported fourth-quarter 2018 adjusted earnings per limited partner unit of 9 cents, missing the Zacks Consensus Estimate of 16 cents due to an increase in storage operating costs. However, its bottom line was higher than the year-ago quarter’s breakeven earnings per unit, given a boost from Pipeline and Fuels Marketing segments.
NuStar’s operating income was $90 million, up 21.5% from the prior-year quarter. The partnership recorded a net income of $2.1 million in the quarter under review compared with $25.2 million in the year-ago period.
Quarterly revenues of $509.3 million beat the Zacks Consensus Estimate of $464 million and the year-ago level of $450.8 million. The outperformance can be attributed to the increased throughput volumes, backed by higher contribution from the Permian crude system.
NuStar Energy L.P. Price, Consensus and EPS Surprise
NuStar Energy L.P. Price, Consensus and EPS Surprise | NuStar Energy L.P. Quote
Cash Flow
Per NuStar’s latest earnings release, distributable cash flow (DCF) available to limited partners was $91.3 million (providing 1.42x distribution coverage), significantly higher than $41.7 million (providing 0.41x distribution coverage) in the year-ago quarter.
Segmental Performance
Pipeline: Total quarterly throughput volumes in the segment were 1,521,814 barrels per day (Bbl/d), up 29.3% from the year-ago period. While throughput volumes in crude oil pipelines jumped 40.5% (owing to higher contribution from the Permian crude system) from the year-ago quarter to 959,041 Bbl/d, throughput from refined product pipelines inched up from 494,354 Bbl/d in the year-ago period to 562,773 Bbl/d.
As a result, throughput and other revenues rose 23.1% year over year to $161.2 million. Concurrently, the segment’s operating income of $74.9 million was up from the year-ago figure of $52.8 million.
Storage: Throughput volumes in the Storage segment rose marginally on a year-over-year basis to 354,567 Bbl/d from 353,617 Bbl/d. The unit’s quarterly revenues fell to $139 million from $152.9 in the prior-year period, due to a plunge in storage terminal revenues (from 130.9 million in fourth-quarter 2017 to $117.2 million in forth-quarter 2018).
Moreover, operating costs recorded an increase from the year-ago quarter. As a result, the segment's operating income decreased 31.3% from a year ago to $34.6 in the reported quarter.
Fuels Marketing: Product sales and other revenues from this segment increased to $210.9 million from $168.8 million in the year-ago quarter. Operating costs rose 29% year over year to $4.6 million. Income from the segment came in at $13.3 million, higher than the year-ago period’s $2.1 million.
Balance Sheet
As of Dec 31, 2018, the partnership’s total debt was $3,130.5 million, representing a debt-to-capitalization ratio of 52.6%.
Guidance
For 2019, the company is expected to have a debt coverage ratio of 4.3 compared to 4.05 in 2018.
Zacks Rank and Stocks to Consider
Currently, NuStar has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below.
Houston, TX-based Shell Midstream Partners, L.P. is a midstream energy company. For 2019, its bottom line, which has witnessed three upside revisions over the past 60 days, is expected to grow 27.7% year over year. The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Houston, TX-based Phillips 66 Partners LP is an oil and gas midstream company. Its bottom line for 2018 is expected to increase more than 56% year over year. It delivered average positive earnings surprise of more than 6% in the trailing four quarters. The stock currently has a Zacks Rank #2.
YPF Sociedad Anonima (YPF - Free Report) is a Buenos Aires, Argentina-based integrated energy company. Its bottom line for 2018 is expected to increase more than 27% year over year. The company currently has a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>