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Magellan Midstream (MMP) Q1 Earnings and Sales Top Estimates
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Magellan Midstream Partners, L.P. reported first-quarter 2020 adjusted earnings per unit of $1.28, surpassing the Zacks Consensus Estimate of $1.03 as well as the year-ago profit of $1.06. Strong contribution from Refined Products unit aided results.
Quarterly revenues of $783 million not only rose from the year-ago level of $629 million but also outpaced the Zacks Consensus Estimate of $679 million.
Segmental Performance
Refined Products: Revenues from the segment came in at $629 million, up from $468.5 million recorded in the year-ago period. Notably, total volumes shipped in the quarter under review were 119.8 million barrels compared with 116.1 million barrels a year ago. Operating margin from the segment expanded to $305.8 million in the first quarter from $207.4 million in the corresponding period of 2019. While depreciation costs increased year over year, general & administration expenses decreased. Operating profit of the segment increased 78.6% year over year to $233 million.
Crude Oil: Quarterly revenues grossed $164.5 million, up 6% year over year on the back of higher volumes. Total volumes shipped in the quarter were 75.1 million barrels, down from 79.4 million barrels a year ago. Operating margin decreased to $119.9 million from $142.8 million in the prior year. Operating profit of $93.7 million declined 17.6% year over year due to lower volumes and margins.
Magellan Midstream Partners LP Price, Consensus and EPS Surprise
Magellan Midstream reported that its distributable cash flow (DCF) for the first quarter summed $306.5 million, dipping 3.6% from the year-ago level.
Notably, on Apr 23, the partnership announced first-quarter cash distribution of $1.0275 per unit ($4.11 on an annualized basis), representing 2% annual growth. The amount is payable May 15 to unitholders of record as of May 8.
As of Mar 31, 2020, the partnership had cash and cash equivalents worth $139 million, and a long-term debt of $4.75 billion.
2020 Outlook
As a result of the coronavirus-caused oil price plunge, management expects to generate distributable cash flows in the $1,000-$1,075 million range for the full year and is planning to retain the current level of cash distribution for the rest of the year. Magellan Midstream projected second-quarter 2020 earnings per unit between 35 cents and 50 cents while for the full year, earnings are estimated in the $3.35-$3.70 band.
The firm plans to spend $400 million on completing certain expansion projects in the ongoing year. Additionally, Magellan Midstream continues to look out for more than $500 million worth of potential organic growth projects in their nascent stages of development.
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Magellan Midstream (MMP) Q1 Earnings and Sales Top Estimates
Magellan Midstream Partners, L.P. reported first-quarter 2020 adjusted earnings per unit of $1.28, surpassing the Zacks Consensus Estimate of $1.03 as well as the year-ago profit of $1.06. Strong contribution from Refined Products unit aided results.
Quarterly revenues of $783 million not only rose from the year-ago level of $629 million but also outpaced the Zacks Consensus Estimate of $679 million.
Segmental Performance
Refined Products: Revenues from the segment came in at $629 million, up from $468.5 million recorded in the year-ago period. Notably, total volumes shipped in the quarter under review were 119.8 million barrels compared with 116.1 million barrels a year ago. Operating margin from the segment expanded to $305.8 million in the first quarter from $207.4 million in the corresponding period of 2019. While depreciation costs increased year over year, general & administration expenses decreased. Operating profit of the segment increased 78.6% year over year to $233 million.
Crude Oil: Quarterly revenues grossed $164.5 million, up 6% year over year on the back of higher volumes. Total volumes shipped in the quarter were 75.1 million barrels, down from 79.4 million barrels a year ago. Operating margin decreased to $119.9 million from $142.8 million in the prior year. Operating profit of $93.7 million declined 17.6% year over year due to lower volumes and margins.
Magellan Midstream Partners LP Price, Consensus and EPS Surprise
Magellan Midstream Partners LP price-consensus-eps-surprise-chart | Magellan Midstream Partners LP Quote
DCF & Balance Sheet
Magellan Midstream reported that its distributable cash flow (DCF) for the first quarter summed $306.5 million, dipping 3.6% from the year-ago level.
Notably, on Apr 23, the partnership announced first-quarter cash distribution of $1.0275 per unit ($4.11 on an annualized basis), representing 2% annual growth. The amount is payable May 15 to unitholders of record as of May 8.
As of Mar 31, 2020, the partnership had cash and cash equivalents worth $139 million, and a long-term debt of $4.75 billion.
2020 Outlook
As a result of the coronavirus-caused oil price plunge, management expects to generate distributable cash flows in the $1,000-$1,075 million range for the full year and is planning to retain the current level of cash distribution for the rest of the year. Magellan Midstream projected second-quarter 2020 earnings per unit between 35 cents and 50 cents while for the full year, earnings are estimated in the $3.35-$3.70 band.
The firm plans to spend $400 million on completing certain expansion projects in the ongoing year. Additionally, Magellan Midstream continues to look out for more than $500 million worth of potential organic growth projects in their nascent stages of development.
Zacks Rank & Stocks to Consider
Magellan Midstream has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are CNX Resources Corporation. (CNX - Free Report) , Cheniere Energy Inc. (LNG - Free Report) and KLR Energy Acquisition Corp. (ROSE - Free Report) , all three carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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