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Buckeye Misses on Q4 Earnings

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Buckeye Partners L.P.’s (BPL - Free Report) fourth quarter 2013 earnings of 75 cents per unit were a whopping 134.4% higher than the year-ago number. Earnings however trailed the Zacks Consensus Estimate of 85 cents by 11.8%.

Commencement of operation at the recently refurbished truck rack at the Perth Amboy terminal and sales from BORCO facility contributed to the bottom-line growth in 2013, as compared to 2012, due to the mid-year launch of BORCO facility in 2012.

Buckeye reported 2013 earnings of $3.23 per unit, surpassing the Zacks Consensus Estimate of $3.21 marginally by 0.62% and the 2012 number by 36.3%. This upswing was due to a rise in pipeline and terminal volumes by 5.8% and 6.8% respectively in 2013.
Total Revenue

Buckeye Partners’ total revenue at the end of the quarter was $1.7 billion, up 47.2% year over year. Quarterly revenue also surpassed the Zacks Consensus Estimate of $1.2 billion by 33.3%.

Revenues for the full year were reported at $5.1 billion, up 17.9% from $4.3 billion reported in 2012.

Top-line growth was largely attributed to increased sales volume from the Merchant Services segment as a result of the Hess acquisition.

Segment Analysis

Pipeline and Terminal operations – Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) from this segment increased year over year to $132.2 million from $116.7 million in the fourth quarter 2012. This segment was a major contributor of the partnership’s favorable performance in the reported quarter. Expansion of butane blending capacity added to the segment’s adjusted EBITDA.

Global Marine Terminals - This segment came out with another favorable performance in the fourth quarter, posting adjusted EBITDA of $40.5 million, up from $36.9 million in the corresponding year-ago quarter. This increase can be attributed to the expansion of the storage facility at BORCO and contribution from St. Lucia facility.

Merchant Services – Adjusted EBITDA in this segment decreased 79.9% year over year to $1.8 million in the fourth quarter.

Development & Logistics – This segment reported an increase in adjusted EBITDA of 37.2% year over year to $4.1 million in the fourth quarter of 2013.

Operational Highlights

In the fourth quarter, total costs and expenses increased 43.7% to $1.5 billion from $1.1 billion in the year-ago period. The acquisition of Hess and other costs related to personnel and maintenance led to the upswing in total expenses.

Buckeye Partners’ adjusted EBITDA moved up nearly 8.0% year over year to $178.6 million.

Interest and debt expenses during the quarter were $36.1 million versus $29.8 million reported in the year-ago quarter.

Financial Screening

Total cash and cash equivalents as of Dec 31, 2013, were nearly $5.0 million versus $6.8 million as of Dec 31, 2012.

Buckeye Partners' long-term debt as of Dec 31, 2013, was $3.1 billion compared with $2.7 billion as of Dec 31, 2012.

The partnership spent $104.0 million on capital expenditure during the quarter compared with $98.3 million in the prior-year quarter. The higher capex in the reported quarter went to fund Buckeye Partners’ expansion of crude oil rail capabilities and butane blending capacity to new locations.

Cash Distribution

Buckeye Partners’ cash distribution rate in the fourth quarter, 2013, was $1.0875 per unit, which reflects a 4.8% increase from the fourth quarter 2012 cash distribution of $1.0375 per unit.

The 2013 cash distribution of the partnership came to $4.275 per unit, reflecting an increase of 3.0% from $4.15 in 2012.

Other Earnings Releases

Magellan Midstream Partners LP (MMP - Free Report) reported fourth quarter earnings of 88 cents per unit, surpassing the Zacks Consensus Estimate of 82 cents by 7.3%.

El Paso Pipeline Partners posted fourth quarter earnings of 48 cents per unit, falling behind the Zacks Consensus Estimate of 51 cents by 5.9%.

Kinder Morgan Energy Partners, L.P. released fourth quarter earnings of 33 cents per unit, which fell short of the Zacks Consensus Estimate of 36 cents by 8.3%.

Zacks Rank

Buckeye Partners presently holds a Zacks Rank #3 (Hold).

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