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An overview of Spectra Energy’s 3Q14 earnings

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An overview of Spectra Energy’s revenues and profits

In the previous section of the series, we discussed Spectra Energy’s (SE) assets and segment performance. In this article we’ll analyze how the company performed in the latest quarter.

Spectra Energy released its 3Q14 financial results on November 5. Other energy midstream companies that have recently released 3Q14 results include AGL Resources (GAS), TransCanada Corporation (TRP), and DCP Midstream (DPM). Here is an account of Spectra Energy’s recent performances.

In 3Q14, Spectra Energy’s quarterly revenues increased 5.5% to $1.20 billion from $1.14 billion in 3Q13.

Net income for March 2014 decreased 23.6% to $201 million from $263 million recorded in March 2013. Net income margin (or net income as percentage of revenues) also fell to 16.7% in March 2014 from 23% in the year-ago quarter.

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Segment-wise change in EBITDA

From 3Q13 to 3Q14, Spectra Energy’s Spectra Energy Partners segment EBITDA gained the most, while the Field Services segment suffered the most. In contrast to a 17.2% increase in Spectra Energy Partners’ (SEP) EBITDA, the Field Services segment witnessed a 63% decrease during this period. Spectra Energy is a component of the Energy Select Sector SPDR ETF (XLE).

Factors affecting Spectra Energy’s quarterly results

A number of concerns outweighed the positive factors affecting results for the latest quarter. The quarter’s earnings increased on account of the following:

  • Expansion projects in the Texas Eastern Transmission assets belonging to Spectra Energy Partners (SEP), an operating subsidiary of Spectra Energy
  • Higher volumes in Sand Hills and Southern Hills assets
  • Higher crude oil transportation revenues

The following factors negatively affected the latest quarter’s results:

  • A weaker Canadian dollar relative to the US dollar
  • Higher maintenance costs and outages in Western Canada Transmission & Processing segment
  • Weaker commodity prices, higher operating costs, and the effect of hedges in the Field Services’ segment

Read the following section to learn about Spectra Energy’s year-to-date results.

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