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Will Energy Transfer Partners Miss Its Revenue Estimates Again?

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2Q15 revenue estimates

Wall Street analysts have lowered Energy Transfer Partners’ (ETP) 2Q15 revenue estimates compared with the previous quarter. ETP’s 1Q15 revenue estimate was ~$13.44 billion, and the 2Q15 estimate is ~$9.53 billion—a decrease of ~29.1%.

The lower revenue estimate could be attributable to two factors. ETP’s Midstream, Investment in Sunoco Logistics, and Retail Marketing segment revenues would be negatively impacted by low crude oil, natural gas, NGLs (natural gas liquids), and refined product prices. These segments are also involved in commodity marketing and distribution apart from other fee-based midstream services.

ETP is usually negatively affected in the second and the third quarter of the year due to lower natural gas and NGL demand during the warmer spring and summer weather.

The decline in ETP’s 2Q15 revenue is expected to be offset by:

  • growth in revenue resulting from the ETP–Regency consolidation completed in April 2015
  • growth in throughput volumes from expansion projects placed into service in the first half of 2015
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Reported revenue versus consensus estimates

Energy Transfer Partners (ETP) has missed its revenue estimates in seven out of the last 12 quarters. After a ~19.6% miss in 4Q14, ETP again missed its 1Q15 revenue estimate by a huge margin. Its 1Q15 revenue estimate was ~$13.44 billion, but it reported revenues of ~$9.53 billion—a ~29.1% miss.

We’ll have to wait for the 2Q15 earnings release to see whether ETP beats or misses its 2Q15 revenue estimates. We’ll cover this in a post-earnings series on ETP in a couple of weeks.

Peer comparisons

ETP peers Enbridge Energy Partners (EEP), Enable Midstream Partners (ENBL), and Spectra Energy Partners (SEP) missed their 1Q15 revenue estimates by 23.12%, 28.11%, and 1.38%, respectively. Together, SEP, EEP, and ETP account for ~14.21% of the Alerian MLP ETF (AMLP).

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