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Phillips 66 Partners (PSXP) Earnings Miss Estimates in Q1

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Phillips 66 Partners LP’s first-quarter 2019 earnings per unit came in at 92 cents, failing to beat the Zacks Consensus Estimate of 98 cents, but improving from the year-ago 87 cents.

Revenues of $423 million rose from $355 million in the year-ago quarter and beat the Zacks Consensus Estimate of $369 million.

The year-over-year improvement in quarterly results was backed by the increase in transported oil volumes and higher terminal throughput volumes of crude & refined petroleum products. This was partially offset by a surge in operating and maintenance expenses.

Operating Information

The partnership provides services through Pipelines, Terminals and Storage, Processing & Other activities.

Pipeline: In first-quarter 2019, the partnership generated revenues of $109 million from pipeline transportation business, up from $102 million a year ago. Higher transported volumes of oil led to the improvement.

Terminals: The partnership generated $40 million from terminals, a slight improvement from $39 million a year ago, thanks to higher terminal throughput volumes of crude and refined petroleum products.

Storage, Processing & Other activities: Through these activities, the partnership generated revenues of $153 million, up from $115 million in the year-ago quarter.

Operating and Maintenance Expenses

In the March quarter of 2019, the company reported operating and maintenance expenses of $139 million, more than 43% higher than $97 million reported in the year-ago quarter.

Balance Sheet

As of Mar 31, 2019, the partnership recorded cash and cash equivalents of $2 million and total debt of $3,188 million — translating to a debt-to-capitalization ratio of 58%.

Zacks Rank and Key Picks

Phillips 66 Partners currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are Anadarko Petroleum Corporation , ProPetro Holding Corp. (PUMP - Free Report) and TransCanada Corp. (TRP - Free Report) . Anadarko sports a Zacks Rank #1 (Strong Buy), while ProPetro and TransCanada hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.      

Anadarko Petroleum has average positive earnings surprise of 6.6% for the past four quarters.

The Zacks Consensus Estimate for Midland, TX-based ProPetro’s 2019 earnings is pegged at $2.42, indicating 21% growth over the year-ago reported figure. Next year’s forecast is $2.70, hinting at 11.5% growth.

TransCanada has beaten estimates in the last four quarters, the average being 19%.

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