Magellan Midstream Partners, L.P. (MMP), a transporter and distributor of refined petroleum products, on Tuesday reported a 25 percent increase in profit for the fourth quarter on higher revenues. Both earnings and revenue topped analysts' expectations. Looking ahead, the company forecast earnings for the first quarter and fiscal 2012 above analysts' estimates.
The Tulsa, Oklahoma-based company's net income for the fourth quarter rose to $110.26 million or $0.97 per limited partner unit from $87.96 million or $0.78 per limited partner unit in the year-ago period.
Net income per unit excluding mark-to-market commodity-related pricing adjustments was $1.02 for the quarter, exceeding the company's guidance of $0.93 per share provided in early November. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.96 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues rose 18 percent to $486.93 million from $398.49 million in the year-ago period and topped analysts' consensus estimate of $433.82 million.
Transportation and terminals revenue rose 5.5 percent to $232.71 million, while product sales revenue surged 43 percent to $254.04 million. Affiliate management fee revenue edged up 1.6 percent to $192 thousand.
For fiscal year 2011, Midstream Magellan Partners' net income rose to $413.57 million or $3.66 per limited partner unit from $311.58 million or $2.85 per limited partner unit last year. Revenues grew 12 percent to $1.75 billion from $1.56 billion in the prior year.
Analysts expected the company to earn $3.61 per share on revenues of $1.70 billion.
The company said it continues to evaluate the potential sale of the partnership's ammonia pipeline system. The company has entered into negotiations related to a potential sales transaction, but said it cannot estimate the ultimate timing or completion of such a sale.
Looking ahead to the first quarter, Magellan Midstream Partners forecasts net income per limited partner unit of $0.98 per share.
For fiscal 2012, the company forecasts net income per limited partner unit to be $3.75.
Analysts expect earnings of $0.90 per share for the quarter and $3.66 per share for the year.
Magellan Midstream Partners expects the favorable momentum of 2011 to continue for 2012 as additional expansion projects come online. Further, the company said it targets annual distribution growth of 9 percent for 2012, and 8 percent to 10 percent for 2013.
In Tuesday's regular session, MMP is trading at $68.57, up $0.36 or 0.53 percent on a volume of 40,993 shares.
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