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Why Is TC PipeLines, LP (TCP) Down 29.1% Since Last Earnings Report?

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It has been about a month since the last earnings report for TC PipeLines, LP . Shares have lost about 29.1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is TC PipeLines, LP 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 drivers.

TC PipeLines Q4 Earnings & Revenues Fall Year-over-Year

TC PipeLines witnessed unpleasant earnings in fourth-quarter 2019. The firm reported earnings of 95 cents a unit, down 10.4% from $1.06 cents in the year-ago quarter due to higher maintenance capital expenditures along with lower revenues resulting from the termination of the Bison contracts.

Also, quarterly transmission revenues of $104 million compared unfavorably with $220 million recorded in fourth-quarter 2018 amid lower rates of many of its pipelines induced by the 2018 FERC actions.

Distribution & Cash Flow

TC PipeLines announced fourth-quarter cash distribution of 65 cents per unit, in line with the year-ago figure. Notably, this marks the 83rd quarterly distribution by the partnership.

The partnership's distributable cash flow decreased to $76 million in the quarter under review from $95 million in the year-ago period due to higher system utilization resulting in increased maintenance and operating expenses.

In the reported quarter, TC PipeLines distributed $47 million in cash, flat with the year-ago period.

Pipeline Systems' Performance

Great Lakes:  Earnings of $14 million generated from equity investment were in line with the prior-year quarter’s figure.

Northern Border Pipeline: Equity earnings totaled $19 million, in line with the prior-year level.

Iroquois: Equity earnings amounted to $12 million, above the prior-year figure of $11 million.

Expenses

Operation and maintenance expenses were $20 million in the quarter, above the year-earlier period’s $19 million. General/administrative expenses totaled $2 million, unchanged from the year-ago number. Property taxes came in at $7 million, same as the year-ago level. Depreciation costs declined to $20 million from $24 million a year ago. Financial and other charges also decreased to $20 million from $22 million in the corresponding period of 2018.

Balance Sheet

As of Dec 31, TC PipeLines’ cash and cash equivalents summed $83 million. The partnership had a long-term debt of $1,880 million, representing a debt-to-capital ratio of 71.2%.


 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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