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What Will Drive Boardwalk Pipeline Partners’ 4Q16 EBITDA?

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Boardwalk Pipeline’s 4Q16 EBITDA estimates

Boardwalk Pipeline Partners (BWP) is scheduled to release its 4Q16 earnings on February 6, 2017. BWP peer EQT Midstream Partners (EQM) is expected to report its 4Q16 earnings on February 2, 2017. For pre-earnings analysis of EQM, read EQT Midstream Partners: Why 4Q16 Could Be the Best Quarter to Date.

In this series, we’ll talk about BWP’s 4Q estimates, market performance, key performance indicators, and analyst recommendations. Let’s start with analysts’ earnings estimates.

Wall Street analysts’ 4Q16 consensus EBITDA (earnings before interest, taxes, depreciation, and amortization) estimate for BWP is $202.4 million. BWP’s 4Q16 estimate is 7.0% higher than the 4Q15 adjusted EBITDA and 14.9% more than the previous quarter’s adjusted EBITDA.

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Boardwalk Pipeline’s 4Q16 EBITDA drivers

The expected YoY growth in BWP’s 4Q16 earnings could be driven by the following factors:

  • higher natural gas demand from residential customers due to lower winter temperatures
  • higher NGL (natural gas liquids) throughput volumes
  • projects placed into service such as the Southeast Market Expansion project

The above positives might be slightly offset by the YoY decline in Eagle Ford production impacting BWP’s gathering volumes. However, BWP is protected to some extent from these declines through firm-contracted revenues.

Boardwalk Pipeline’s adjusted EBITDA versus consensus estimates

The 3Q16 EBITDA estimate for BWP was $179.0 million, while the adjusted EBITDA was 1.4% higher at $176.0 million. We’ll have to wait for the 4Q16 earnings release to see whether BWP manages to beat its 4Q16 EBITDA estimates. We’ll cover this in our post-earnings series for BWP once it reports its 4Q16 results.

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