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TC PipeLines' (TCP) Earnings Top, DCF Decreases Y/Y in Q2
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TC PipeLines delivered better-than-expected results for second-quarter 2020. The firm reported earnings of 78 cents a unit, beating the Zacks Consensus Estimate of 71 cents and also increasing 4% from the year-ago quarter’s 75 cents, attributable to higher revenues of PNGTS from its extension projects and lower operating and maintenance expenses.
Also, quarterly transmission revenues of $95 million surpassed the Zacks Consensus Estimate of $91 million and improved from $93 million recorded in second-quarter 2019 as well.
Distribution & Cash Flow
TC PipeLines announced second-quarter cash distribution of 65 cents per unit, in line with the year-ago figure. Notably, this marks the 85th quarterly distribution by the partnership.
The firm's distributable cash flow (DCF) decreased to $55 million in the quarter under review from $70 million in the year-ago period due to weak adjusted EBITDA and higher normal-course maintenance capital expenditures at GTN Xpress. However, the coverage ratio for the second quarter came in at an impressive 1.2x. A coverage ratio in excess of 1 implies that the partnership is generating more than enough cash in any given period (in this case, second quarter) to cover its distribution.
In the reported quarter, TC PipeLines distributed $47 million in cash, same as the year-ago level.
TC PipeLines, LP Price, Consensus and EPS Surprise
Great Lakes: Earnings of $9 million generated from equity investment matched the prior-year quarter’s figure.
Northern Border Pipeline: Equity earnings totaled $13 million, marginally lower than the prior-year level.
Iroquois: Equity earnings amounted to $7 million, flat with the prior-year figure.
Expenses
Operation and maintenance expenses were $16 million in the quarter, lower than the year-ago number of $17 million. General/administrative expenses summed $2 million, unchanged from the year-ago number. Property taxes increased to $7 million from $6 million a year ago. Depreciation costs came in at $19 million, same as the year-ago level. Financial and other charges also fell to $18 million from $21 million in the corresponding period of 2019.
Balance Sheet
As of Jun 30, TC PipeLines’ cash and cash equivalents were worth $215 million. The partnership had a long-term debt of $1.76 billion, representing total debt to total capital of 69.1%.
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TC PipeLines' (TCP) Earnings Top, DCF Decreases Y/Y in Q2
TC PipeLines delivered better-than-expected results for second-quarter 2020. The firm reported earnings of 78 cents a unit, beating the Zacks Consensus Estimate of 71 cents and also increasing 4% from the year-ago quarter’s 75 cents, attributable to higher revenues of PNGTS from its extension projects and lower operating and maintenance expenses.
Also, quarterly transmission revenues of $95 million surpassed the Zacks Consensus Estimate of $91 million and improved from $93 million recorded in second-quarter 2019 as well.
Distribution & Cash Flow
TC PipeLines announced second-quarter cash distribution of 65 cents per unit, in line with the year-ago figure. Notably, this marks the 85th quarterly distribution by the partnership.
The firm's distributable cash flow (DCF) decreased to $55 million in the quarter under review from $70 million in the year-ago period due to weak adjusted EBITDA and higher normal-course maintenance capital expenditures at GTN Xpress. However, the coverage ratio for the second quarter came in at an impressive 1.2x. A coverage ratio in excess of 1 implies that the partnership is generating more than enough cash in any given period (in this case, second quarter) to cover its distribution.
In the reported quarter, TC PipeLines distributed $47 million in cash, same as the year-ago level.
TC PipeLines, LP Price, Consensus and EPS Surprise
TC PipeLines, LP price-consensus-eps-surprise-chart | TC PipeLines, LP Quote
Pipeline Systems' Performance
Great Lakes: Earnings of $9 million generated from equity investment matched the prior-year quarter’s figure.
Northern Border Pipeline: Equity earnings totaled $13 million, marginally lower than the prior-year level.
Iroquois: Equity earnings amounted to $7 million, flat with the prior-year figure.
Expenses
Operation and maintenance expenses were $16 million in the quarter, lower than the year-ago number of $17 million. General/administrative expenses summed $2 million, unchanged from the year-ago number. Property taxes increased to $7 million from $6 million a year ago. Depreciation costs came in at $19 million, same as the year-ago level. Financial and other charges also fell to $18 million from $21 million in the corresponding period of 2019.
Balance Sheet
As of Jun 30, TC PipeLines’ cash and cash equivalents were worth $215 million. The partnership had a long-term debt of $1.76 billion, representing total debt to total capital of 69.1%.
Zacks Rank & Key Picks
TC Pipelines currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Murphy USA Inc. (MUSA - Free Report) , CNOOC Limited (CEO - Free Report) and SilverBow Resources Inc. (SBOW - Free Report) , each presently sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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