Gas and Oil processor MarkWest Energy Partners LP (MWE), Monday reported a sharp decline in third quarter profit on a 61% drop in revenues, led by a plunge in derivative gains, compared with last year. Looking ahead to 2009 and 2010, the company provided distributable cash flow guidance.
Third-quarter net income attributable to the Denver, Colorado- based company plunged to $8.280 million from $186.546 million last year. Earnings per share attributable to unit-holders was $0.13, compared to $3.24 a year ago.
On average, 6 analysts polled by Thomson Reuters expected the company to report a profit of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.
The company reported cash available for distribution to common unit-holders, or distributable cash flow, of $40.3 million compared with $45.4 million last year.
Income from operations for the July-September period declined to $35.65 million, compared with $253.69 million a year-ago. The company noted that the results of the recent quarter were impacted by lower commodity prices than last year.
Third quarter total revenue fell sharply to $217.69 million from $566.37 million last year, however, ahead of $194.35 million anticipated by Street analysts.
While Oil and Gas product revenues slipped to $207.93 million from $303.56 million last year, the recently ended quarter registered a miniscule $9.76 million in a derivative gain, compared with $262.81 million that boosted last year's top-line.
Southwest segment operations yielded lower at $123.79 million, compared to $192.68 million a year-ago. Northeast operations contributed $55.55 million, down from $82.42 million last year. Gulf Coast operations earned $15.8 million, compared to $28.47 million in the prior-year.
Total operating expenses were favorably lower at $182.04 million from $312.69 million last year, led by a $80.4 million drop in purchased product costs and $59 million lower related derivative losses, offset by higher depreciation and facility expenses for the three-month period, compared with a year-ago.
For the nine-months ended September 30, the company slipped to a loss of $88.88 million or $1.52 per share from a profit of $27.93 million or $0.55 per share in the same period of 2008. Revenues dropped to $511.13 million from $770.73 million last year.
The company noted that it has improved $700 million in liquidity through market transactions, joint ventures, and the divestiture of the steam methane reformer facility, and plans to invest the resource in capital projects in the Marcellus, Woodford, Haynesville, and Granite Wash.
Looking forward for the full year 2009, the company forecasts distributable cash flow in a range of $170 million - $180 million. For 2010, the company anticipates the distributable cash flow range between $170 million - $210 million.
MWE finished Monday's regular trading at $25.73, up 65 cents or 2.59% on the NYSE.
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