Plains All American Pipeline, L.P. ( PAA Quick Quote PAA - Free Report) reported second-quarter 2020 adjusted earnings of 25 cents per unit, which missed the Zacks Consensus Estimate of 28 cents by 10.7%. The bottom line also plunged 62.7% from the year-ago quarter’s figure. In the quarter under review, the partnership reported GAAP earnings of 13 cents per unit, down 76% from 54 cents earned in the year-ago quarter. Total Revenues
Total revenues of $3,225 million missed the Zacks Consensus Estimate of $7,029 million by 54.2%. Further, the top lineslumped 60.9% from $8,253 million reported a year ago.
Highlights of the Release
In the quarter under review, Plains All American’s total costs and expenses were $3,015 million, down 61.4% year over year. This downside was owing to lower purchases and related costs, field operating costs as well as general and administrative expenses. Consequently, the firm’s operating income dropped to $210 million from $451 million in the prior-year quarter.
Total adjusted EBTIDA (Non-GAAP) for the quarter was $524 million, down 33.2% from the year-ago quarter. Interest expenses increased 4.9% year over year to $108 million. Segmental Performance
In the Transportation segment, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $346 million decreased 15.6% from the year-ago quarter’s figure, primarily due tocontracted tariff volumes in multiple regions caused by soft crude oil prices, production shut-ins and tighter regional basis differentials during the quarter.
In the Facilities segment, adjusted EBITDA summed $174 million, up 1.2% from the year-ago quarter’s reported figure. This uptrend was primarily driven by operational cost savings and an expanded capacity at certain Mid-Continent and Gulf Coast crude oil storage terminals. The Supply and Logistics segment reported adjusted EBITDA of $3 million, which tumbled 98.5% from the year-ago quarter’s figure of $200 million. Thisdowntrend was primarily caused by less favorable crude oil differentials in both Permian Basin and Canada. Financial Update
As of Jun 30, 2020, current assets were $3,161 million compared with $4,612 million at2019 end.
As of Jun 30, 2020, Plains All American had long-term debt of $9,393 million compared with $9,187 million on Dec 31, 2019. As of the same date, its long-term debt-to-total book capitalization was 49%, up from 41% at the end of 2019. Guidance
Plains All American raised its 2020 earnings expectation to $1.49 per unit, up from its previous estimateof $1.44. The partnership also lifted its 2020 adjusted EBITDA by 3% to $2.5 billion from its prior guidance.
Plains All American trimmed 2020/2021 expansion capital spending projection to $1.45 billion, marking a 6% cut from the prior guided range. Zacks Rank
Plains All American currently carries a Zacks Rank #3 (Hold). You can see
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