Refined petroleum products transporter Buckeye Partners, L.P. (BPL) on Tuesday reported a loss for the second quarter compared to a profit last year, hurt by charges and a quarterly revenue drop. However, adjusted earnings per share rose 23.8%, but came in below analysts' expectations. The partnership also announced an increase in quarterly partnership cash distribution.
In a statement, chairman and chief executive officer, Forrest Wylie said, "Despite serious challenges presented in the current economic climate, Buckeye continued to perform well through the second quarter. Adjusted EBITDA for the second quarter and first half of 2009 increased 15% and 17%, respectively, relative to those periods in 2008. Although we experienced volume declines in our pipeline and terminalling and storage businesses that largely offset the benefits of increased tariffs and fees, new terminals added since the second quarter of 2008 and effective cost management made a substantial contribution to our earnings in the second quarter of 2009."
The Breinigsville, Pennsylvania-based partnership reported a net loss of $59.83 million or $1.17 per LP unit for the second quarter, compared to net income of $33.99 million or $0.63 per LP unit in the prior-year quarter.
The results for the latest quarter include $72.5 million of special charges related to recognizing an asset impairment and $28.1 million for expenses related to an organizational restructuring.
Excluding special items, adjusted net income for the quarter rose to $52.08 million or $0.78 per LP unit from $40.85 million or $0.63 per LP unit in the year-ago quarter. On average, nine analysts polled by Thomson Reuters expected the partnership to report earnings of $0.79 per share for the second quarter. Analysts' estimates typically exclude special items.
Total revenue for the quarter dropped to $351.22 million from $492.55 million in the same quarter last year, and significantly missed six Wall Street analysts' consensus estimate of $442.49 million.
Revenue from product sales dropped to $201.78 million from $346.44 million in the prior-year quarter, while transportation and other revenues edged up to $149.44 million from $146.11 million in the year-ago quarter.
Segment-wise, revenues for pipeline operations was down a tad to $98.18 million from $98.89 million a year ago. Terminalling and storage revenues rose to $29.43 million from $27.11 million in the year-ago quarter.
Revenue for natural gas storage increased to $16.67 million from the prior-year quarter's $15.19 million and energy services revenues plunged to $201.68 million from $347.77 million in the same quarter last year.
Operating loss for the second quarter was $34.51 million, compared to operating income of $58.67 million in the prior-year quarter, and total costs and expenses was $385.73 million, down from $433.88 million in the year-ago quarter.
Cost of product sales for the quarter was $193.44 million, compared to $341.59 million in the same quarter last year. Expenses for the latest quarter included asset impairment expense $72.54 million and reorganization expense of $28.11 million.
Buckeye noted that it continues to take important steps to position the partnership well for both difficult economic times and in anticipation of eventual economic recovery, and added that it is implementing comprehensive organizational changes that is anticipated to result in annual savings of $18 million to $22 million beginning in 2010.
The partnership also announced a $0.0125 per LP unit increase in the regular quarterly partnership cash distribution to $0.9125 per LP unit, citing Buckeye's solid operating results for the second quarter, payable on August 31 to unitholders of record on August 7, 2009.
For the first six months, the partnership reported a net loss of $17.73 million or $0.36 per LP unit, compared to net income $68.09 million or $1.35 per LP unit in the prior-year period. Excluding special items, adjusted net income for the period climbed to $105.84 million or $1.65 per LP unit from $68.09 million or $1.35 per LP unit in the year-ago period.
Total revenues for the year-to-date period decreased to $768.06 million from $872.82 million in the same quarter last year.
BPL closed Tuesday's regular trading session at $46.01, down $0.13 or 0.28% on a volume of 0.10 million shares, lower than the three-month average volume of 0.16 million shares.
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