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Why Is Nustar Energy (NS) Down 4.5% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Nustar Energy L.P. (NS - Free Report) . Units have lost about 4.5% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2017 Results
NuStar Energy reported first-quarter earnings per limited partner unit of $0.49, lower than the Zacks Consensus Estimate of $0.52 per limited partner unit. Further, this also compares unfavorably with the prior-year adjusted earnings of $0.57. The weaker result was primarily due to the increase in the cost of product sales.
Quarterly revenues of $487 million beat the Zacks Consensus Estimate of $446 million and also came in well above the year-ago level of $406 million.
Quarterly Distribution
NuStar Energy announced a quarterly distribution of $1.095 per unit ($4.38 per unit annualized), flat both sequentially and on an annualized basis.
Per NuStar Energy’s earnings release, distributable cash flow (DCF) available to limited partners for the first quarter was $88.9 million (providing 0.87x distribution coverage) compared with $91.3 million (providing 1.06x distribution coverage) without the impact of equity offering that the partnership undertook to finance the acquisition of Navigator Energy Services.
Segmental Performance
Pipeline: Total quarterly throughput volume in the segment was 922,825 barrels per day (Bbl/d), down 1% from the year-ago period. Throughput volumes in the crude oil pipelines dipped 0.5% from the year-ago quarter to 408,809 Bbl/d, whereas refined product pipelines throughput was down 1.4% to 514,016 Bbl/d. Lower drilling activities in the South Texas and Eagle Ford Basin contributed to the slight decrease in the throughput volumes.
Throughput revenues increased 2% year over year to $121,240 million. The segment’s operating income of $65 million was slightly higher than the year-ago figure of $64.3 million. This is mainly due to the higher revenues associated with refined product pipelines.
Storage: Throughput volumes in the Storage segment fell 62% year over year to 315,010 Bbl/d. There was a 3.3% decline in the unit’s quarterly revenues to $147.4 million from $152.4 million in the prior-year quarter. It is to be noted here that the throughputs for the three months also included 506,674 barrels per day from our refinery storage at Corpus Christi, which changed from throughput-based to lease-based effective Jan 1, 2017. The marginal net decline after taking into account the lease factor is attributed to turnaround at a refinery.
The segment’s operating income of $53.7 million was 5.7% lower than $57 million earned in the year-ago quarter. Lower throughput was responsible for the downside. However weaker throughput revenues were partially offset by higher renewal storage rates, increased fees associated with the Martin acquisition and lower operating expenses.
Fuels Marketing: The unit reported operating income of $5.1 million compared with the year-ago loss of $0.8 million. The improvement is attributed to improved margins and decreased operation expenses along with better results from the fuels trading business.
Costs & Expenses
The partnership incurred total costs of $207.8 million, up 61% year over year. Operating expenses came in at $101 million, down 4% from the year-ago period. This was due to the efficiency measures executed in many of the operating regions.
Balance Sheet
As of Mar 31, 2017, the partnership had total debt of $3,023 million, which represents a debt-to-capitalization ratio of 65.8%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three downward revisions for the current quarter compared to two upward. In the past month, the consensus estimate has shifted downward by 22.4% due to these changes.
At this time, Nustar Energy's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Nustar Energy (NS) Down 4.5% Since the Last Earnings Report?
It has been about a month since the last earnings report for Nustar Energy L.P. (NS - Free Report) . Units have lost about 4.5% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2017 Results
NuStar Energy reported first-quarter earnings per limited partner unit of $0.49, lower than the Zacks Consensus Estimate of $0.52 per limited partner unit. Further, this also compares unfavorably with the prior-year adjusted earnings of $0.57. The weaker result was primarily due to the increase in the cost of product sales.
Quarterly revenues of $487 million beat the Zacks Consensus Estimate of $446 million and also came in well above the year-ago level of $406 million.
Quarterly Distribution
NuStar Energy announced a quarterly distribution of $1.095 per unit ($4.38 per unit annualized), flat both sequentially and on an annualized basis.
Per NuStar Energy’s earnings release, distributable cash flow (DCF) available to limited partners for the first quarter was $88.9 million (providing 0.87x distribution coverage) compared with $91.3 million (providing 1.06x distribution coverage) without the impact of equity offering that the partnership undertook to finance the acquisition of Navigator Energy Services.
Segmental Performance
Pipeline: Total quarterly throughput volume in the segment was 922,825 barrels per day (Bbl/d), down 1% from the year-ago period. Throughput volumes in the crude oil pipelines dipped 0.5% from the year-ago quarter to 408,809 Bbl/d, whereas refined product pipelines throughput was down 1.4% to 514,016 Bbl/d. Lower drilling activities in the South Texas and Eagle Ford Basin contributed to the slight decrease in the throughput volumes.
Throughput revenues increased 2% year over year to $121,240 million. The segment’s operating income of $65 million was slightly higher than the year-ago figure of $64.3 million. This is mainly due to the higher revenues associated with refined product pipelines.
Storage: Throughput volumes in the Storage segment fell 62% year over year to 315,010 Bbl/d. There was a 3.3% decline in the unit’s quarterly revenues to $147.4 million from $152.4 million in the prior-year quarter. It is to be noted here that the throughputs for the three months also included 506,674 barrels per day from our refinery storage at Corpus Christi, which changed from throughput-based to lease-based effective Jan 1, 2017. The marginal net decline after taking into account the lease factor is attributed to turnaround at a refinery.
The segment’s operating income of $53.7 million was 5.7% lower than $57 million earned in the year-ago quarter. Lower throughput was responsible for the downside. However weaker throughput revenues were partially offset by higher renewal storage rates, increased fees associated with the Martin acquisition and lower operating expenses.
Fuels Marketing: The unit reported operating income of $5.1 million compared with the year-ago loss of $0.8 million. The improvement is attributed to improved margins and decreased operation expenses along with better results from the fuels trading business.
Costs & Expenses
The partnership incurred total costs of $207.8 million, up 61% year over year. Operating expenses came in at $101 million, down 4% from the year-ago period. This was due to the efficiency measures executed in many of the operating regions.
Balance Sheet
As of Mar 31, 2017, the partnership had total debt of $3,023 million, which represents a debt-to-capitalization ratio of 65.8%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three downward revisions for the current quarter compared to two upward. In the past month, the consensus estimate has shifted downward by 22.4% due to these changes.
Nustar Energy L.P. Price and Consensus
Nustar Energy L.P. Price and Consensus | Nustar Energy L.P. Quote
VGM Scores
At this time, Nustar Energy's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.