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Why Is Phillips 66 Partners LP (PSXP) Down 2.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Phillips 66 Partners LP (PSXP - Free Report) . Shares have lost about 2.3% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Phillips 66 Partners LP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Phillips 66 Partners Earnings Miss Estimates in Q1

Phillips 66 Partners LP’s first-quarter 2019 earnings per unit came in at 92 cents, failing to beat the Zacks Consensus Estimate of 98 cents, but improving from the year-ago 87 cents.

Revenues of $423 million rose from $355 million in the year-ago quarter and beat the Zacks Consensus Estimate of $369 million.

The year-over-year improvement in quarterly results was backed by the increase in transported oil volumes and higher terminal throughput volumes of crude & refined petroleum products. This was partially offset by a surge in operating and maintenance expenses.

Operating Information

The partnership provides services through Pipelines, Terminals and Storage, Processing & Other activities.

Pipeline: In first-quarter 2019, the partnership generated revenues of $109 million from pipeline transportation business, up from $102 million a year ago. Higher transported volumes of oil led to the improvement.

Terminals: The partnership generated $40 million from terminals, a slight improvement from $39 million a year ago, thanks to higher terminal throughput volumes of crude and refined petroleum products.

Storage, Processing & Other activities: Through these activities, the partnership generated revenues of $153 million, up from $115 million in the year-ago quarter.

Operating and Maintenance Expenses

In the March quarter of 2019, the company reported operating and maintenance expenses of $139 million, more than 43% higher than $97 million reported in the year-ago quarter.

Balance Sheet

As of Mar 31, 2019, the partnership recorded cash and cash equivalents of $2 million and total debt of $3,188 million — translating to a debt-to-capitalization ratio of 58%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, Phillips 66 Partners LP has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Phillips 66 Partners LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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