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Enterprise Earnings Beat Ests, Revs Miss

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Enterprise Products Partners L.P. (EPD - Free Report) reported fourth-quarter 2013 adjusted earnings per limited partner unit of 80 cents, which surpassed the Zacks Consensus Estimate of 70 cents and were higher than the year-ago quarterly earnings of 71 cents.

For full-year 2013, adjusted earnings per limited partner unit were $2.82, which beat the Zacks Consensus Estimate of $2.77 and increased from $2.71 in the prior year.

Transportation of more crude, natural gas and other commodities through its pipelines led to the improvement. Enterprise transported 5,220 thousand barrels per day of natural gas liquids (NGL), crude oil, refined products and petrochemical products, up 15.9% on a year-over-year basis.

Quarterly distribution at Enterprise increased 6.1% year over year to 70 cents per common unit, or $2.80 per unit on an annualized basis. Distributable cash flow of $1,021 million provided coverage of 1.5x. The partnership retained $382 million in cash flow, thereby reducing its financing needs.

Revenues in the quarter increased nearly 18.3% year over year to $13,101.3 million but failed to meet the Zacks Consensus Estimate of $13,629.0 million.

In 2013, revenues increased 12.1% year over year to $47,727.0 million from $42,583.1 million in 2012 but came in below the Zacks Consensus Estimate of $48,186.0 million.

Fourth Quarter Segmental Performance

Gross operating income in the NGL Pipeline & Services segment rose 16.6% year over year to $737.0 million.

Onshore Natural Gas Pipeline and Services’ gross operating income decreased 11.0% year over year to $187.0 million.

Gross operating income from the Onshore Crude Oil Pipelines & Services segment shot up 21% year over year to $163.0 million in the reported quarter.

Gross operating income in the Petrochemical & Refined Product Services segment improved to $175.0 million in the quarter from the year-earlier level of $143.0 million.

However, Enterprise’s Offshore Pipelines & Services’ gross operating income was $28 million in the quarter, lower than $42 million a year ago.


During the quarter, the partnership spent $1.3 billion, including $78 million of sustaining capital expenditures. Total debt principal outstanding at the end of the quarter was $17.4 million.


Enterprise Products is a core holding in a master limited partnership portfolio and focuses on projects that generate stable cash flow and contribute to its integrated value chain. While Enterprise increased its cash flow distribution by 6.1% in the reported quarter, it also deployed cash in various fee-based development projects that will likely generate operating cash flow to support its future distribution growth.

For 2014, the company expects continuing volume and gross operating margin growth from its NGL pipelines and fractionators; crude oil pipelines and storage facilities; and LPG and refined product export terminals businesses.

However, Enterprise remains vulnerable to macro conditions and unstable oil and gas prices, which in turn could hurt margins in NGL, natural gas and other businesses.

Enterprise currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the energy sector like Marathon Petroleum Corp. (MPC - Free Report) , CVR Energy, Inc. , and Profire Energy, Inc. (PFIE - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy).


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