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Analyzing the Sales and Gross Profit of Midstream Companies

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Sales and gross profit performance

In fiscal 3Q15, the gross profit of frontline midstream operator Williams Companies (WMB) fell 28.6% on a YoY (year-over-year) basis. Williams Companies’ sales grew by 11.3%. Also, the sales of Kinder Morgan (KMI), Energy Transfers Partners (ETP), and Energy Transfer Equity (ETE) grew by 15%, 10%, and 15.2%, respectively. These companies’ gross profit grew by 13%, 5%, and 97% on a YoY (year-over-year) basis.

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The gross profits for midstream companies Spectra Energy Partners (SEP) and Plains All American Pipeline (PAA) rose by 16% and 20%, respectively, on a YoY basis in fiscal 3Q15. In addition, the sales of Spectra Energy Partners and Plains All American Pipeline grew by 15% and 3%, respectively. The above midstream companies are also operating a small proportion in either the downstream or the “other energy” segment. Their main revenue sources are usually from oil and gas transportation. The above graph shows the sales and gross profit growth on a YoY basis for the previously mentioned midstream companies.

The above midstream companies also have some operations in either the downstream or the “other energy” segment. Their main revenue sources are usually from oil and gas transportation. The graph shows the sales and gross profit growth on a YoY basis for the midstream companies above.

YTD performance

Finally, let’s look at a breakdown of the above companies’ YTD (year-to-date) performances:

  • The midstream companies mentioned above fell by an average of 43% on a YTD basis though large-cap upstream companies fell by ~34%.
  • Energy Transfer Equity’s gross profits grew by 97% on a YoY basis in fiscal 3Q15 but fell by 53% on a YTD basis.
  • Magellan Midstream Partners (MMP) and Spectra Energy Partners only fell by 18% and 22%, respectively, on a YTD basis.
  • The Alerian MLP ETF (AMLP) fell by 35% on a YTD basis.

In the next part, we will discuss renewable energy companies.

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