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Enterprise Products (EPD) Q3 Earnings Top Estimates, Rise Y/Y

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Enterprise Products Partners L.P. (EPD - Free Report) reported third-quarter 2018 adjusted earnings per limited partner unit of 51 cents, which beat the Zacks Consensus Estimate of 46 cents. The bottom line improved from the year-ago quarter’s 30 cents.

Higher transportation volumes of natural gas liquid (NGL), natural gas and crude oil aided the partnership’s strong third-quarter earnings. This was, however, partially offset by a surge in operating expenses.

Quarterly revenues totaled $9,586 million, up from $6,887 million in the year-ago quarter. The top line, however, missed the Zacks Consensus Estimate of $9,788 million.

Quarterly distribution at Enterprise Products Partners increased 0.5% sequentially and 2.4% year over year to 43.25 cents per common unit. Adjusted distributable cash flow of $1.6 billion provided coverage of 1.7x.

Q3 Segmental Performance

Record third-quarter 2018 gross operating income of $1.1 billion from the NGL Pipelines & Services segment reflects a rise of 38% from $771 million a year ago. The upside can be attributed to higher transportation and fractionation volumes.

Natural Gas Pipeline and Services segment recorded gross operating income of $217 million compared with $171 million in the prior-year quarter. The upside can be attributed to a jump in transportation volumes.

Crude Oil Pipelines & Services segment’s gross operating income skyrocketed to $594 million from $190 million in the July-to-September quarter of 2017, thanks to a rise in marine terminal and transportation volumes.

Petrochemical & Refined Product Services segment saw its gross operating income grow to $249 million from the year-ago quarter’s $172 million. The rise was backed by an increase in gross operating margin at the propylene business.

Operating Cost and Expenses

During the third quarter of 2018, the partnership’s operating cost and expenses surged 31.6% to $8,001.9 million.


As of Sep 30, 2018, the partnership’s total outstanding debt principal was $26.1 billion. By the end of the third quarter, consolidated liquidity of the partnership was recorded at $3.3 billion. This includes both the unrestricted cash on hand and borrowing capacity under revolving credit facilities. The partnership reported total capital spending of $1.1 billion in the quarter under review.

Other News

In a separate announcement, the partnership declared intentions to expand its fractionation capacity of NGL by 150,000 barrels per day at its facilities in Mont Belvieu complex. With the commencement of the service of the new plant, expected by second-quarter 2020, the partnership will be able to increase its company-wide fractionation capacity to 1.5 million barrels per day.

Zacks Rank & Other Stocks to Consider

Enterprise Products carries a Zacks Rank #2 (Buy). Other prospective players in the energy space areMurphy Oil Corporation (MUR - Free Report) , Enbridge Inc (ENB - Free Report) and Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) . While Murphy and Enbridge sport a Zacks Rank #1 (Strong Buy), Petrobras carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.  

Murphy has an average positive surprise of 96.5% for the last four quarters.

Enbridge will likely see earnings growth of 42.2% in 2018. 

Petrobras’ bottom line beat the Zacks Consensus Estimate in three of the trailing four quarters.

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