Genesis Energy (GEL) Misses Q2 EPS by 22c, Revenues Beat

Genesis Energy (NYSE: GEL) reported Q2 EPS of ($0.05), $0.22 worse than the analyst estimate of $0.17. Revenue for the quarter came in at $752.39 million versus the consensus estimate of $732.93 million.

Grant Sims, CEO of Genesis Energy, said, “On August 7, 2018, we granted a third party a time-limited option to acquire certain of our non-core assets in exchange for an option payment of $30 million. If that third party timely exercises its option, it will be obligated to purchase those assets for a specified sum less $30 million, subject to customary conditions to closing. There is no guaranty (i) that that third party will exercise its option or (ii) if that third party exercises its option, that the conditions to closing will be satisfied or the closing will otherwise occur.

Turning to our financial results, businesses in the quarter continued to perform well and delivered financial results that provided 1.55 times coverage of our sequentially increased quarterly distribution.

Something that we are focused on is performance below our expectations in our offshore business. Three particular major fields have underperformed our expectations over the last two or three quarters. One field we believe is underperforming as a result of reservoir quality degradation and not due to mechanical factors. Offsetting this in future years are two subsea tie-backs to the same dedicated in-field production facility scheduled to come online; one in early 2019 and one later in 2019. Between now and then, however, our segment margin will be around $5 million a quarter less than what we had previously anticipated."

For earnings history and earnings-related data on Genesis Energy (GEL) click here.

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