The ups and downs of Enterprise Products Partners’ 4Q14 results (Part 2 of 13)
Enterprise Products Partners releases its 4Q14 earnings
Enterprise Products Partners (EPD) released its 4Q14 results on January 29, 2015. Another MLP that recently released its 4Q14 results is Plains All American Pipeline (PAA).
Williams Partners (WPZ) and TC Pipelines (TCP) are two energy MLPs that are expected to announce their 4Q14 results soon. All these are components of the Alerian MLP ETF (AMLP). PAA and WPZ together account for 12.2% of AMLP.
Adjusted earnings fall short of estimates
Between 2Q12 and 4Q14, Enterprise Product Partners’ adjusted earnings per unit (or EPU) increased 15%. It decreased ~9% from 4Q13 to 4Q14.
For 4Q14, adjusted EPU fell short of consensus EPU by 4%. On average, Enterprise Product Partners’ adjusted EPU has exceeded the consensus EPU by ~3% in the past 11 quarters.
The 1Q15 consensus sell side analysts’ adjusted EPU estimate for Enterprise Product Partners is ~$0.34, 3% lower than the $0.35 per share it recorded in 4Q14.
Distributions up, coverage down
In 4Q14, Enterprise Product Partners increased its cash distribution to $0.37 per unit. In 2014, the company’s distribution per unit was $1.45, a 5.8% increase over the 2013 distribution.
Distributable cash flows were up 4.1%, from $1.02 billion in 4Q13 to $1.06 billion in 4Q14. Distributable cash flows in 4Q14 included proceeds from asset sales and the monetization of financial instruments used to hedge interest rates.
The distribution coverage in 4Q14 was 1.5x compared to 1.6x in 4Q13. Coverage ratio is distributable cash flows divided by distributed cash. A ratio greater than one indicates the company has excess cash after paying out distribution, which is a sign of an MLP’s good financial health.
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