EEP missed 3Q15 revenue estimates

Enbridge Energy Partners’ (EEP) revenues of $1.3 billion in 3Q15 were 0.9% lower than analysts’ consensus estimates. The company has missed consensus revenue estimates in four out of the last ten quarters.

Enbridge Energy Partners’ 3Q15 revenues are 3.5% lower than its 2Q15 revenues and 35% lower compared to its 3Q14 revenues. Low energy commodity prices that have persisted since mid-2014 have negatively impacted the revenues of most MLPs.

Enbridge Energy Partners Marginally Missed 3Q15 Revenue Estimates

Factors impacting EEP’s 3Q15 revenues

The chart above shows the revenue estimates and adjusted revenues that Enbridge Energy Partners earned over the last ten quarters. Enbridge Energy Partners forms ~1% of the Guggenheim Multi-Asset Income ETF (CVY). The following factors impacted Enbridge Energy Partners’ revenues in the third quarter:

  • Higher revenues due to an increase in transportation rates and higher deliveries on EEP’s liquids pipeline systems. Total liquids system deliveries increased 6.5% in the quarter over 3Q14.
  • Increased contributions from growth projects that were placed into service in 2014 and 2015. These included the Eastern Access Program and a phase of the US Mainline Expansion project.
  • Higher NGL (natural gas liquids) production volumes.
  • Decreased natural gas system volumes, primarily attributable to the continued low commodity price environment, resulted in reductions in drilling activity from producers in EEP’s areas of operations.

Enbridge Energy Partners’ natural gas assets are primarily located in Texas and Oklahoma. Its natural gas assets are owned by Midcoast Energy Partners (MEP). Enbridge Energy Partners owns 48.4% of Midcoast Energy Partners.

The low commodity price environment has impacted the performance of almost all natural gas gathering and processing MLPs, including Targa Resources (NGLS), MarkWest Energy Partners (MWE), Tallgrass Energy Partners (TEP), and Southcross Energy Partners (SXE).

Next, we’ll analyze Enbridge Energy Partners’ 3Q15 EBITDA (earnings before interest, tax, depreciation, and amortization) and compare it with the estimates.

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