Back to top

Image: Bigstock

Plains All American (PAA) Q2 Earnings Lag Estimates, Slump Y/Y

Read MoreHide Full Article

Plains All American Pipeline, L.P. (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 the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Enterprise Products Partners LP (EPD - Free Report) reported second-quarter 2020 adjusted earnings per unit of 47 cents, beating the Zacks Consensus Estimate by a penny.

PBF Logistics LP (PBFX - Free Report) reported second-quarter adjusted earnings per unit of 60 cents, beating the Zacks Consensus Estimate of 50 cents by 20%.

ONEOK Inc (OKE - Free Report) posted second-quarter 2020 operating earnings of 32 cents per share, which missed the Zacks Consensus Estimate of 50 cents by 36%.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>