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NuStar (NS) Stock Changes Little Since Q2 Earnings Release
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NuStar Energy L.P. (NS - Free Report) recently reported weak second-quarter 2020 earnings. However, the disappointing results could not affect the stock movement so far as there has been no major price change since the earnings release on Aug 4.
Oil pipeline operator NuStar Energy reported second-quarter adjusted earnings per unit of 6 cents, below the Zacks Consensus Estimate of 16 cents. The partnership’s bottom line also fell from the year-ago earnings of 10 cents. Quarterly performance was impacted by lower-than-anticipated operating income from the pipeline segment. Notably, the partnership’s Pipeline unit reported an operating income of $72 million, missing the Zacks Consensus Estimate of $84 million.
Moreover, NuStar Energy reported revenues of $339.5 million, lagging the Zacks Consensus Estimate of $351 million and also declining 8.6% year over year.
Also, the company recorded an operating income of $92.7 million, marginally lower than the profit of $93.2 million in the corresponding quarter of last year.
Segmental Performance
Pipeline: Total quarterly throughput volumes were 1,516,417 barrels per day (Bbl/d), down 8.6% from the year-ago period. Throughput volumes from crude oil pipelines fell 2.4% from the year-ago quarter to 1,063,739Bbl/d while throughput from refined product pipelines witnessed a decrease to 452,678Bbl/d from 569,820Bbl/d. Precisely, the volume slump at NuStar Energy’s Permian crude system contracted pipeline throughputs. As a result, the segment’s revenues dipped 3.7% year over year to $166.1 million. Moreover, the firm’s Pipeline unit reported an operating income of $72 million compared with the operating income of $78.7 million in the year-ago period.
Storage: Throughput volumes plummeted to 348,189Bbl/d from 395,512Bbl/d in the prior-year quarter. However, the unit’s quarterly revenues increased to $119.4 million from $110.4 a year ago owing to surging throughput terminal revenues (from $23.2 million to $32.2 million). Further, NuStar Energy’s Storage segment benefited from a full-quarter contribution from the new Taft 30-inch pipeline and other expansion projects. Evidently, the segment’s operating income summed $43.2 million in the June quarter compared with $38.1 million in the comparable period last year.
Fuels Marketing: Product sales decreased to $54 million from $89.5 million in the year-ago quarter. On a positive note, cost of goods dropped 41.6% from the prior-year period to $50.1 million. Moreover, NuStar Energy delivered strong margins from its bunkering business. The segment recorded earnings of $3.3 million in the quarter under review compared with $3.2 million in second-quarter 2019.
NuStar Energy L.P. Price, Consensus and EPS Surprise
Second-quarter 2020 distributable cash flow available to limited partners was $62.5 million, lower than $82.9 million in the year-ago period. However, distribution coverage improved to 1.43X from 1.28X in the second quarter of 2019. A coverage ratio far in excess of 1 implies that the partnership is generating more than enough cash in the period to cover its distribution.
As of Jun 30, the partnership’s total consolidated debt was $3.4 billion.
Taking into account the impact of the historic oil market crash and the coronavirus-induced demand woes for the fuel, NuStar Energy reiterates its 2020 adjusted EBITDA guidance in the band of $665-735 million. This is around 6% lower at the midpoint than its projection provided before the coronavirus pandemic.
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NuStar (NS) Stock Changes Little Since Q2 Earnings Release
NuStar Energy L.P. (NS - Free Report) recently reported weak second-quarter 2020 earnings. However, the disappointing results could not affect the stock movement so far as there has been no major price change since the earnings release on Aug 4.
Oil pipeline operator NuStar Energy reported second-quarter adjusted earnings per unit of 6 cents, below the Zacks Consensus Estimate of 16 cents. The partnership’s bottom line also fell from the year-ago earnings of 10 cents. Quarterly performance was impacted by lower-than-anticipated operating income from the pipeline segment. Notably, the partnership’s Pipeline unit reported an operating income of $72 million, missing the Zacks Consensus Estimate of $84 million.
Moreover, NuStar Energy reported revenues of $339.5 million, lagging the Zacks Consensus Estimate of $351 million and also declining 8.6% year over year.
Also, the company recorded an operating income of $92.7 million, marginally lower than the profit of $93.2 million in the corresponding quarter of last year.
Segmental Performance
Pipeline: Total quarterly throughput volumes were 1,516,417 barrels per day (Bbl/d), down 8.6% from the year-ago period. Throughput volumes from crude oil pipelines fell 2.4% from the year-ago quarter to 1,063,739Bbl/d while throughput from refined product pipelines witnessed a decrease to 452,678Bbl/d from 569,820Bbl/d. Precisely, the volume slump at NuStar Energy’s Permian crude system contracted pipeline throughputs. As a result, the segment’s revenues dipped 3.7% year over year to $166.1 million. Moreover, the firm’s Pipeline unit reported an operating income of $72 million compared with the operating income of $78.7 million in the year-ago period.
Storage: Throughput volumes plummeted to 348,189Bbl/d from 395,512Bbl/d in the prior-year quarter. However, the unit’s quarterly revenues increased to $119.4 million from $110.4 a year ago owing to surging throughput terminal revenues (from $23.2 million to $32.2 million). Further, NuStar Energy’s Storage segment benefited from a full-quarter contribution from the new Taft 30-inch pipeline and other expansion projects. Evidently, the segment’s operating income summed $43.2 million in the June quarter compared with $38.1 million in the comparable period last year.
Fuels Marketing: Product sales decreased to $54 million from $89.5 million in the year-ago quarter. On a positive note, cost of goods dropped 41.6% from the prior-year period to $50.1 million. Moreover, NuStar Energy delivered strong margins from its bunkering business. The segment recorded earnings of $3.3 million in the quarter under review compared with $3.2 million in second-quarter 2019.
NuStar Energy L.P. Price, Consensus and EPS Surprise
NuStar Energy L.P. price-consensus-eps-surprise-chart | NuStar Energy L.P. Quote
Cash Flow, Debt and Guidance
Second-quarter 2020 distributable cash flow available to limited partners was $62.5 million, lower than $82.9 million in the year-ago period. However, distribution coverage improved to 1.43X from 1.28X in the second quarter of 2019. A coverage ratio far in excess of 1 implies that the partnership is generating more than enough cash in the period to cover its distribution.
As of Jun 30, the partnership’s total consolidated debt was $3.4 billion.
Taking into account the impact of the historic oil market crash and the coronavirus-induced demand woes for the fuel, NuStar Energy reiterates its 2020 adjusted EBITDA guidance in the band of $665-735 million. This is around 6% lower at the midpoint than its projection provided before the coronavirus pandemic.
Zacks Rank & Key Picks
NuStar Energy has a Zacks Rank #3 (Hold), currently. 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.
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>>