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Why Plains All American Missed 3Q15 Consensus Revenue Estimates

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Plains All American missed 3Q15 revenue estimates

Plains All American Pipeline’s (PAA) revenues of $5.5 billion in 3Q15 were 22% lower than analysts’ consensus estimate. It has missed consensus revenue estimates in six out of the last ten quarters. Plains All American Pipeline’s 3Q15 revenues were 17% lower than its 2Q15 revenues. Its 3Q15 revenues were nearly half of its 3Q14 revenues. Low energy commodity prices since mid-2014 have negatively impacted revenues of most MLPs.

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Factors contributing to PAA’s lower 3Q15 revenues

The above graph compares Plains All American Pipeline’s revenues with estimates over ten quarters. PAA forms ~0.6% of the Multi-Asset Diversified Income ETF (MDIV). The following factors contributed to PAA’s lower 3Q15 revenues:

  • PAA lost revenues associated with the shutdown of its All American system from Las Flores to Pentland.
  • A weaker Canadian dollar negatively impacted PAA’s revenues during the quarter.
  • Its rail and natural gas storage activities were negatively impacted by the less favorable environment for these activities during the quarter.
  • Lower margins and volumes were associated with PAA’s crude oil lease gathering activities due to the low commodity price environment.

Enterprise Products Partners (EPD) also missed its 3Q15 revenue estimates. Read more in Enterprise Products Missed Consensus Revenue Estimates for 3Q15.

Other MLPs with crude oil pipeline assets include Genesis Energy (GEL), Magellan Midstream Partners (MMP), MPLX (MPLX), and NuStar Energy (NS).

In the next part of this series, we’ll see why Plains All American Pipeline’s EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter fell and how it compared with the estimates.

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