Monday, Targa Resources Partners LP (NGLS), a provider of natural gas, reported higher fourth quarter earnings, as revenues increased from the prior year.
For the quarter, net income attributable to Targa Resources Partners LP surged to $38.4 million from $19.8 million in the corresponding period last year. Earnings rose to $0.56 per limited partner unit on 61.6 million units outstanding from $0.48 per limited partner unit on 46.3 million units outstanding last year. Net income for the quarter included $3.8 million of non-cash charges related to derivative instruments compared with $11.8 million in the corresponding period last year.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.38 per share. Analysts estimates excludes special items.
Quarterly revenues grew 18% to $1.255 billion from $1.066 billion in the year-ago quarter. Four Street analysts expected the company to report revenues of $1.21 billion for the quarter.
Revenues from the sale of natural gas declined by $74.4 million, consisting of decreases of $66.1 million due to lower realized prices and $8.3 million due to lower sales volumes. Average realized prices for natural gas declined by $1.73 per MMBtu, to $4.32 per MMBtu from $6.05 per MMBtu in the year-ago quarter. Sales volumes declined by 14.9 BBtu/d, or 3%, to 414.5 BBtu/d from 429.4 BBtu/d in the same period last year.
Revenues from the sale of NGLs grew by $262.9 million, consisting of an increase of $231.2 million due to higher realized prices and an increase of $31.7 million due to higher sales volumes. Average realized prices increased by $0.23 per gallon to $1.04 per gallon rom $0.81 per gallon in the corresponding period last year. Sales volumes increased by 10.2 MBbl/d, or 4%, to 256.9 MBbl/d from 246.7 MBbl/d in the year-ago quarter.
Revenues from the sale of condensate advanced by $3.8 million, consisting of an increase of $2.2 million due to higher realized prices and $1.6 million due to higher sales volumes. Average realized price increased by $8.11 per barrel, to $60.52 per barrel from $52.41 per barrel in the year-ago quarter. Sales volumes increased by 0.3 MBbl/d, or 12%, to 2.9 MBbl/d from 2.6 MBbl/d in the same quarter of the previous year.
Product purchases grew by 17%, to $1.108 billion from $943.7 million in the year-ago quarter.
Income from operations more than doubled to $54.9 million from $26.2 million in the year-ago quarter.
The company expects total capital expenditures to be about $130 million in 2010. Maintenance capital expenditures is estimated to be about 25% of the total 2010 estimate.
Operating expenses declined 24% to $43 million from $56.3 million in the year-ago period. General and administrative expense increased 109% to $23.4 million from $11.2 million in the fourth quarter of the previous year. The increase included expenses related to professional services, allocated corporate level expenses and insurance expenses.
Interest expense decreased by 35% to $16.7 million from $25.5 million in the year-ago quarter. The decrease is primarily a result of the elimination of affiliate indebtedness, somewhat offset by the issuance of the company's 11.25% senior unsecured notes
Targa said that, with the closing of the acquisition of the Downstream Business in 2009, the results of operations of the Partnership include the historical results of the Downstream Business.
For the twelve-month period, net income increased to $52 million or $0.86 per limited partner unit from $49.4 million or $1.83 per limited partner unit in 2008. Revenues slid to $4.095 billion from $7.502 billion last year. Street analysts expected the company to report earnings of $0.66 per share on revenues of $2.69 billion for 2009.
Rene Joyce, chief executive officer of the Partnership's general partner and of Targa Resources, Inc. said, "We executed on our business strategies by managing controllable costs and capital expenditures, closing the dropdown of the Downstream Business, increasing our gathering and processing inlet volumes and finalizing the necessary commercial agreements to support a major expansion of Cedar Bayou Fractionator. In 2010 we will continue our focus on organic and acquisition-based growth opportunities."
NGLS is currently up $0.76 or 3.04% and trades at $25.76.
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