DCP Midstream Partners (DPM) Misses Q2 EPS by 28c

DCP Midstream Partners (NYSE: DPM) reported Q2 EPS of $0.12, $0.28 worse than the analyst estimate of $0.40. Revenue for the quarter came in at $348 million versus the consensus estimate of $385.48 million.

• Net income attributable to partners was $45 million in the second quarter of 2016, or $0.12 per basic and diluted limited partner unit and net loss attributable to partners was $(2) million in the second quarter of 2015, or $(0.29) per basic and diluted limited partner unit.
• Distributable cash flow was $128 million in the second quarter of 2016 resulting in a distribution coverage ratio of 1.06 times in the second quarter of 2016 and 1.21 times for the trailing twelve months.
• Adjusted EBITDA was $138 million in the second quarter of 2016 versus $151 million in the second quarter of 2015. Adjusted EBITDA decreased from the second quarter 2016 versus the same period in 2015 due to the expiration of direct commodity hedges at the end of the first quarter 2016, which was offset by growth primarily from the DJ Basin systems, higher NGL volumes on certain NGL pipelines and lower operating costs due to continued cost savings initiatives. The second quarter 2016 also reflected lower natural gas throughput volumes primarily on the Eagle Ford and East Texas systems and lower commodity prices.
• The Partnership agreed to sell its non-strategic Northern Louisiana system for $160 million during the second quarter and closed the transaction on July 1, 2016. Proceeds were used to repay a portion of the outstanding borrowings on the Partnership's credit facility. The assets were sold for a high multiple and the sale is expected to be neutral to distributable cash flow for 2016.
• The Partnership has also idled approximately 320 million cubic feet per day of underutilized processing capacity in its Eagle Ford and East Texas systems. The idling of these plants has contributed to lower costs and improved asset utilization.

"Our focused execution in a continued difficult environment delivered lower operating costs, growth in fee based assets and improved asset utilization offsetting our anticipated hedge roll-off," said Wouter van Kempen, chairman, CEO and president of the Partnership, and of DCP Midstream, the owner of the Partnership's general partner. “Once again these results underscore how the execution of our DCP 2020 strategy continues to contribute to our performance and is resetting the business to be sustainable in any environment."

For earnings history and earnings-related data on DCP Midstream Partners (DPM) click here.

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