Magellan Midstream Partners, L.P. ( MMP Quick Quote MMP - Free Report) , the diversified energy infrastructure provider, reported a second-quarter adjusted net income of $1.13 per unit, higher than the Zacks Consensus Estimate of $1.01. The outperformance reflects higher transportation volumes along with increased drilling activities spurred by high commodity prices.
However, the bottom line came lower than the year-earlier quarter’s earnings of $1.38 per unit due to much higher total costs and expenses.
MMP’s revenues of $788.6 million rose about 20.6% from the second quarter of 2021 and beat the Zacks Consensus Estimate of $689 million by 14.5%.
Operational Performance The operating margin of $246 million was down from the year-ago period’s $267.2 million. Transportation and terminal revenues improved 3.3% to $349.2 million on record-high quarterly transportation volumes resulting from additional contributions from the company’s recent Texas expansions and higher South Texas volumes. The increase in the product margin was primarily due to higher gas liquid blending margins and slightly higher volumes. Refined Products: The operating margin of $108.2 million increased 1.8% from the 2021 second quarter’s figure of $106.3 million as transportation and terminal revenues increased by about 2.3% from the last year’s quarter figure to $121.4 million and because of greater product sales margin due to lower costs in the reported quarter. Crude Oil: Distributable Cash Flow
Magellan Midstream’s DCF for the second quarter was down 14.9% year over year to $228 million.
The company announced a second-quarter cash distribution of $1.0375 per unit ($4.15 on an annualized basis), which was unchanged sequentially. The amount will be paid out on Aug 12 to its unitholders of record as of Aug 5.
Magellan Midstream maintained its 2022 DCF guidance of $1.09 billion.
The partnership updated its 2022 free cash flow guidance from $1.46 billion or $575 million after distributions to $1.45 billion or $578 million after distributions.
Based on second-quarter results and the current number of shares outstanding, the net income per unit is estimated at $5.05 for 2022, with the third-quarter guidance of $1.15 per unit.
Magellan Midstream Partners currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include
Phillips 66 ( PSX Quick Quote PSX - Free Report) , Delek US Holdings ( DK Quick Quote DK - Free Report) and Gulfport Energy ( GPOR Quick Quote GPOR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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