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Enbridge Energy Partners Is Expected to Report Higher 4Q Earnings

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Expected higher EBITDA

Enbridge Energy Partners (EEP) is expected to report its 4Q16 earnings on February 15, 2017. Analysts expect its EBITDA (earnings before interest, tax, depreciation, and amortization) for the fourth quarter of 2016 to be $472.4 million, representing a rise of 5% over its $450.7 million in 4Q15. Notably, EEP’s 4Q16 estimated EBITDA is 3% higher than its 3Q16 EBITDA of $456.8 million.

The above graph shows EEP’s actual EBITDA over the last nine quarters and its expected EBITDA for 4Q16. Despite the expected higher 4Q16 EBITDA, investors are concerned about EEP’s prospects due to its lower 2017 guidance, expected distribution cut, and ongoing strategic review by Enbridge (ENB). (For more, see Enbridge Energy Partners Fell on Lower 2017 Guidance.)

EEP expects to meet its 2016 adjusted EBITDA and distributable cash flow guidance of $1.8 billion–$1.9 billion and $860 million–$920 million, respectively.

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EEP’s distributions

Enbridge Energy Partners announced a 4Q16 quarterly cash distribution of $0.583 per limited partner unit, which is unchanged from its previous quarter distribution. EEP has maintained its $0.583 per unit distribution since 2Q15.

However, under its ongoing strategic review, Enbridge is considering “the sustainability of EEP’s current level of distributions.”

Among Enbridge Energy Partners’ peers, Plains All American Pipelines (PAA) announced flat distributions for 4Q16 as compared to the previous quarter. Enterprise Products Partners (EPD) announced a 4Q16 distribution of $0.41 per common unit, which represents a 5.1% year-over-year rise.

Let’s take a look at Enbridge Energy Partners’ expected segmental performance in 4Q16.

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