Monday, Magellan Midstream Partners, L.P. (MMP), a refined petroleum products transportation company, reported a decline in profit for the second quarter from a year ago as revenues dropped. The company providing an update to its forecast, lifted its fiscal year 2009 earnings guidance.
Magellan Midstream Partners' net income for the second quarter declined to $53.14 million from $94.37 million in the second quarter 2008. The year ago 2008 period benefited from unusually high product margins and a $12.1 million one-time expense reduction in June 2008 related to a favorable settlement for a historical environmental matter. Excluding the two items, net income for the current quarter increased by $5.6 million or 12%.
Net income allocated to general partner's interest declined to $22.73 million from $33.11 million last year.
Net income allocated to limited partners' interest was $30.41 million or $0.45 per unit, compared to $61.27 million or $0.92 per unit a year ago.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter declined to $208.09 million from $272.91 million last year. Six analysts had a consensus revenue estimate of $240.30 million for the company.
Transportation and terminals revenue for the quarter increased to $166.57 million from $162.37 million a year ago, primarily due to higher leased storage, partially offset by lower transportation revenues. Product sales revenue declined to $41.33 million from $110.36 million last year. Affiliate management fee revenue was $0.19 million, compared to $0.18 million in the previous year.
For the six-month period, net income for the limited partner declined to $53.33 million or $0.79 per unit from $135.03 million or $2.02 per unit in the same period of the previous year. Total revenues for the period declined to $420.88 million from $619.41 million a year ago.
Looking forward, the company raised its earnings forecast for 2009 to $2.60 per limited partner unit, excluding the initial $0.20 unfavorable impact of the Longhorn pipeline acquisition. Previously, the company expected $2.50 per limited partner unit for the full year 2009.
Analysts currently expect the company to report earnings of $2.45 per unit for the fiscal 2009.
Specific to third quarter, the company expects $0.60 per limited partner unit, excluding the $0.10 unfavorable impact of Longhorn. Analysts have an earnings view of $0.78 for the third quarter.
MMP is currently trading at $38.59, up 0.80 or 2.02 %, on a volume of 126K shares on the NYSE.
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