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NuStar Energy (NS) Posts Q4 Loss, Revenues Beat Estimates

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San Antonio-based publicly traded partnership, NuStar Energy L.P. (NS - Free Report) reported fourth-quarter loss per limited partner unit of 31 cents. The Zacks Consensus Estimate was of earnings of 54 cents per limited partner unit.

 

 

Also, the partnership had posted earnings of 61 cents in the year-ago quarter. The year-over-year deterioration can be attributed to underperformance by the Storage and Pipeline businesses.

Quarterly revenues of $472 million beat the Zacks Consensus Estimate of $437 million and also came in well above the year-ago level of $465 million.

Quarterly Distribution

Last week, NuStar announced a quarterly distribution of $1.095 per unit ($4.38 per unit annualized), flat both sequentially and on an annualized basis. The distribution is payable on Feb 13, to unitholders on record as of Feb 8, 2016.

Per NuStar’s earnings release, distributable cash flow (DCF) available to limited partners for the fourth quarter was $87.7 million (providing 1.02x distribution coverage) compared with $89.6 million (providing 1.05x distribution coverage).

Segmental Performance

Nustar Energy L.P. Price, Consensus and EPS Surprise

 

Pipeline: Total quarterly throughput volume in the segment was 921,048 barrels per day (Bbl/d), down 6.6% from the year-ago period. Throughput volumes in the crude oil pipelines plunged 14% from the year-ago quarter to 374,170 Bbl/d, whereas refined product pipelines throughput was down 0.8% to 546,878 Bbl/d.

Throughput revenues declined 6% year over year to $122,721 million. The segment’s operating income of $61.5 million  was lower than the year-ago figure of $68.4 million, primarily due to a decrease in throughput volumes from crude oil pipelines.

Storage: Throughput volumes in the Storage segment fell 11.1% year over year to 789,369 Bbl/d. This led to a 4.4% decline in the unit’s quarterly revenues to $148 million from $154.8 million in the fourth quarter of 2015.

The segment’s operating income of $48.3 million was 13.9% lower than $56.1 million earned in the year-ago quarter. Lower throughput and storage terminal revenues were responsible for the downside. 

Fuels Marketing: The unit reported operating income of $3.1 million compared with the year-ago income of $2.8 million. Results improved due to increase in product sales and other revenues.

Costs & Expenses

The partnership incurred total costs of $386.4 million, down 5.3% year over year. Operating expenses came in at $113.1 million, down 3.8% from the year-ago period.

Balance Sheet

As of Dec 31, 2016, the partnership had total debt of $3,068 million, which represents a debt-to-capitalization ratio of 65.6%.

Zacks Rank and Key Stock Picks

Currently, NuStar carries a Zacks Rank #4 (Sell).

Some better-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , McDermott International, Inc. and Suncor Energy Inc. (SU - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.

In the last quarter, McDermott posted a positive earnings surprise of 250.00%.

In the last quarter, Suncor posted a positive earnings surprise of 300.00%.

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