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Buckeye Partners L.P.’s (BPL - Analyst Report) first quarter 2013 operating earnings increased sharply by 59.3% year over year to 86 cents per unit. Earnings also surpassed the Zacks Consensus Estimate by 19.5%.

Strong performance from the Pipeline and Terminal operation was the primary earnings driver in the first quarter.

Total Revenue

Total revenue at the end of the quarter was $1,345 million versus $1,259.4 million in the prior-year quarter, reflecting a surge of 6.8%. Quarterly revenue edged out the Zacks Consensus Estimate by 1.4%.

The modest revenue growth was attributed to favorable contribution from the pipeline and international storage businesses partially offset by low returns from the Energy Service division.

Segment Analysis

Revenue from Pipeline and Terminal operations increased 17.0% year over year to $194.2 million in the first quarter, constituting 14.4% of the overall revenue. Revenue from international operations rose a whopping 240.1% in the first quarter. This division contributed 12.7% to gross revenue.

However, the upswing was partially constrained by a 6.7% decline in the partnership’s Energy Services revenue.

Operational Highlights

The Bahamas Oil Refinery Company International Limited ("BORCO") facility brought online 1.6 million barrels of storage capacity during the quarter.

In the first quarter, total costs and expenses rose 4% year over year to $1,225.8 million. The combination of a 4.1% and 13.8% rise in cost of product sales and gas storage as well as depreciation and amortization expenses led to the cost increase.

The partnership’s adjusted Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) moved up 38% year over year to $158.8 million.

Interest and debt expenses during the quarter were $30.2 million versus $28.8 million reported in the year-ago quarter.

Financial Screening

Total cash and cash equivalents as of Mar 31, 2013, were $4.6 million versus $6.8 million as of Dec 31, 2012.

Buckeye's long-term debt as of Mar 31, 2013, was $2,455.4 million compared with $2,735.2 million as of Dec 31, 2012.

The partnership spent $67.2 million on capital expenditure during the quarter compared with $74.3 million in the prior-year quarter.

Cash Distribution

The partnership once again raised its cash distribution rate. The current distribution rate of the partnership stands at $1.05 per unit, which reflects a 1.2% increase from the first quarter 2012 cash distribution of $1.0375 per unit. The distribution will be payable on May 31, 2013, to unit holders of record on May 16, 2013.

Other Oil and Gas Pipeline Operators

Magellan Midstream Partners LP (MMP - Analyst Report) reported first quarter earnings of 51 cents per unit beating the Zacks Consensus Estimate of 49 cents.

El Paso Pipeline Partners (EPB - Snapshot Report) posted first quarter earnings of 58 cents per unit exceeding the Zacks Consensus Estimate by 7.4%.

TC PipeLines LP (TCP - Analyst Report) registered first quarter 2013 earnings of 52 cents per unit falling behind the Zacks Consensus Estimate by 20.0%.

Zacks Rank

Buckeye Partners presently retains a short-term Zacks Rank #4 (Sell).

Based in Houston, Texas, Buckeye Partners, LP owns and operates refined petroleum products pipeline systems in the United States.

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