Energy Transfer Tops Q2 Earnings, Revs
Natural gas pipeline operator, Energy Transfer Partners LP (ETP), announced impressive second-quarter 2013 results. The results were aided by strong transportation margins owing to increased transported natural gas liquid (NGL) volume.
Energy Transfer reported a profit from continuing operations of 52 cents per limited partner unit, breezing past the Zacks Consensus Estimate of 49 cents. In the year-ago quarter, Energy Transfer reported loss from continuing operations of 3 cents per limited partner unit.
Quarterly revenues of $11,551.0 million were above our projection of $10,986.0 million. Comparing year over year, sales witnessed a whopping increase from $1,596.0 million to $11,551.0.
Quarterly Cash Distribution
Last month, Energy Transfer announced second-quarter distribution of 89.375 cents per unit ($3.575 per unit annualized), unchanged from the previous quarter. The distribution is payable on Aug 14, 2013, to the unitholders of record as of Aug 5, 2013.
EBITDA & Operating Income
Adjusted earnings before interest, taxes, depreciation, and amortization (:EBITDA) for the quarter was $1,069.0 million compared with $642.0 million in the year-ago quarter. The figure reflects significant performance from the Interstate Transportation and Storage and NGL transportation and services business units along with favorable outcome from investments in Sunoco Logistics Partners LP (SXL).
Operating income of $632.0 million was up 77.0% from the second quarter of 2012.
Distributable Cash Flow
Energy Transfer reported distributable cash flow of $442.0 million, up from $316.0 million in the prior-year quarter.
Capital Expenditure
Maintenance capital expenditure totaled $121.0 million, up 57.1% year over year.
Balance Sheet
As of Jun 30, 2013, Energy Transfer had long-term debt (less current maturities) of $16,243.0 million. The debt-to-capitalization ratio was 49.2%.
Zacks Rank
Energy Transfer currently holds a Zacks Rank #5 (Strong Sell), implying that it is expected to significantly underperform the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at oil and pipeline master limited partnerships (MLP) like Delek Logistics Partners LP (DKL) and Magellan Midstream Partners LP (MMP) that offer value. Both the stocks currently retain a Zacks Rank #2 (Buy).
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