Enterprise Products Partners (EPD) Misses Q4 Revenues

Enterprise Products Partners (NYSE: EPD) reported Q4 EPS of $0.15, $0.35 worse than the analyst estimate of $0.50. Revenue for the quarter came in at $7.04 billion versus the consensus estimate of $7.23 billion.

“We are extremely thankful and proud of Enterprise’s employees for their dedication and perseverance in responding to the challenges and opportunities during 2020 caused by the effects of the pandemic,” stated A. J. “Jim” Teague, co-chief executive officer of Enterprise’s general partner. “The diversification of Enterprise’s fee-based businesses, storage assets, marketing activities and cost control enabled us to generate $6.4 billion of distributable cash flow for 2020, which was just 3 percent shy of the record distributable cash flow we earned in 2019. This level of cash flow provided 1.6 times coverage of the $3.9 billion in distributions to limited partners with respect to 2020, covered $200 million of unit buybacks and enabled us to self-fund over 75 percent of our $3 billion of growth capital expenditures for the year. This performance supported our 22nd consecutive year of distribution growth. We also preserved our strong balance sheet.”

“We are optimistic that the combination of the vaccines, significant government stimulus and shorter economic cycles associated with pandemics and natural disasters will lead to the world emerging from this economic sudden stop in 2021. We are encouraged by the early signs of a rebound in the global economy that we see through strong domestic and international demand for NGLs, ethylene and propylene and the continuing recovery in the demand for refined products,” said Teague.

“There are still numerous uncertainties and headwinds for the U.S. energy industry as we begin 2021. The world, with its growing population of almost 8 billion people, including 3 billion living in energy poverty, is evolving and we will evolve with it. We have a successful track record of using technology to become more efficient and repurposing assets to adapt to changes in energy market fundamentals. We believe we are in a position of financial strength to manage through this period. Our financial objectives today are consistent with those when we went public in 1998: building a company that is sustainable for the long-term by maintaining financial flexibility and preserving a strong balance sheet; investing in organic growth projects and acquisitions with attractive returns on capital; and prudently returning capital to our limited partners,” stated Teague.

“In 2021, Enterprise has three major growth capital projects scheduled to begin commercial operations: an expansion of one of the partnership’s ethane pipelines serving the petrochemical industry on the U.S. Gulf Coast (first quarter 2021); our Gillis natural gas pipeline that will deliver Haynesville production to LNG markets in southwestern Louisiana (fourth quarter of 2021); and a hydrotreater in Mont Belvieu that will remove sulfur in natural gasoline (second half of 2021). These projects will provide new sources of cash flow to the partnership,” continued Teague.

“We continue to look at opportunities to increase our use of renewable power and to economically reduce emissions. We estimate by 2025 that 25 percent of our power will be from renewable sources. In addition, several of our growth capital projects in the early stages of development are consistent with the theme of energy evolution,” said Teague.

“Enterprise reported a resilient fourth quarter of 2020 generating $2.1 billion of gross operating margin and $1.6 billion of distributable cash flow compared to $2.0 billion and $1.6 billion, respectively, for the fourth quarter of 2019. The partnership reported record operational or financial performance for our NGL fractionation, propylene, NGL export, and octane enhancement businesses. This was partially offset by lower gross operating margin in our natural gas gathering, processing and marketing businesses; South Texas and Seaway crude oil pipelines and our refined products-related businesses,” stated Teague.

For earnings history and earnings-related data on Enterprise Products Partners (EPD) click here.

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