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Enterprise Products (EPD) Q2 Earnings Top on Transport Volumes

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Enterprise Products Partners LP (EPD - Free Report) reported second-quarter 2019 adjusted earnings per limited partner unit of 55 cents, which beat the Zacks Consensus Estimate of 52 cents. The bottom line also improved from earnings of 46 cents in the year-ago quarter.

Revenues in the quarter declined to $8,276.3 million from $8,467.5 million in the year-ago period. The top line also missed the Zacks Consensus Estimate of $8,794 million.                                                                        

The strong earnings were supported by higher processing volumes in some processing plants in the Permian along with record crude and natural gas transported volumes, partially offset by lower contributions from South Texas NGL fractionators.

Distributable Cash Flow

Quarterly distribution improved 2.3% year over year to 44 cents per common unit or $1.76 per unit on an annualized basis. Adjusted distributable cash flow was at a record level of $1.7 billion, up 21.3% year over year and provided coverage of 1.8x.

Segmental Performance

Gross operating income at the NGL Pipelines & Services segment increased from $913.7 million in the year-ago quarter to $966.3 million. The upside can be attributed to higher fee-based natural gas processing volumes in several processing plants in the Permian basin that includes contribution from the Orla I & II facilities that came online last May and October. This was partially negated by lower margins from the South Texas NGL fractionators.

Natural Gas Pipelines and Services’ gross operating income jumped to $301.8 million from $213.4 million in the year-ago quarter. The upside was supported by record transportation volumes.

The partnership’s Crude Oil Pipelines & Services segment recorded gross operating income at $513.2 million, skyrocketing from $52.8 million in the prior-year quarter. The uptick was buoyed by the transportation of record crude volumes during the quarter and significant marine terminal volumes of the commodity.

Gross operating income at the Petrochemical & Refined Products Services segment amounted to $304.9 million compared with the prior-year level of $281.8 million. The improvement can be primarily attributed to higher margins at the propylene business.


During the quarter, the partnership’s capital expenditure was $1,111.9 million.

Outstanding total debt principal of the partnership as of Jun 30, 2019 was recorded at $27.1 billion. Enterprise Products’ consolidated liquidity amounted to $4.7 billion, which includes unrestricted cash on hand and available borrowing capacity.


Enterprise Products expects to complete the construction of growth developments worth $3.2 billion through the July to December period of 2019.

Zacks Rank & Stocks to Consider

Enterprise Products currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include World Fuel Services Corporation (INT - Free Report) , MPLX LP (MPLX - Free Report) and Oasis Midstream Partners LP (OMP - Free Report) . While World Fuel sports a Zacks Rank #1 (Strong Buy), MPLX and Oasis carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.   

World Fuel beat the Zacks Consensus Estimate in each of the prior four quarters, the average positive earnings surprise being 16.4%.

MPLX is likely to see earnings growth of 23.6% through 2019.

Oasis Midstream has an average positive earnings surprise of 0.3% for the past four quarters.

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