MLPs’ Strong Earnings Growth Continued in 1Q18

Master limited partnerships or MLPs saw continued strong earnings growth in 1Q18 after a solid fourth quarter of 2017. Of the top 15 limited partnerships by market capitalization, 14 reported YoY (year-over-year) growth in quarterly revenue and EBITDA (earnings before interest, tax, depreciation, and amortization). Seven of these limited partnerships reported QoQ (quarter-over-quarter) growth in revenue while nine reported QoQ growth in adjusted EBITDA. Cheniere Energy Partners (CQP) reported the highest YoY EBITDA growth among the selected MLPs, which drove average earnings growth for the Alerian MLP ETF (AMLP). Fourteen of the top 15 MLPs are constituents of AMLP.

In this series, we’ll quickly wrap up earnings for a few of the mid-to-large-cap limited partnerships. But first, let’s summarize the 1Q18 performance of four large-cap MLPs.

Enterprise Products Partners (EPD), the largest US MLP by market capitalization, posted 27.0% YoY revenue growth and 19.2% YoY EBITDA growth. However, EPD’s quarterly EBITDA margin shrunk by 118 basis points or bps YoY to 18.1%. For a post-earnings review of EPD, see Enterprise Products’ Distributable Cash Flow Rose 23% in 1Q18.

Williams Partners (WPZ), the MLP subsidiary of Williams Companies (WMB), reported 5.0% and 0.4% YoY revenue and EBITDA growth, respectively, in 1Q18. For WPZ’s 1Q18 performance drivers, see Williams: Earnings Hit 1Q18 Estimate, Guidance Reaffirmed.

MPLX LP (MPLX) saw huge 60.3% YoY and 79.7% YoY revenue and EBITDA growth, respectively, in the first quarter. Moreover, MPLX’s EBITDA margin expanded by 578 bps. For a post-earnings analysis of MMP’s 1Q18 earnings, see Dropdown Assets Drive MPLX’s 1Q18 Earnings Growth.

Energy Transfer Partners (ETP), the MLP subsidiary of Energy Transfer Equity (ETE), posted strong 1Q18 earnings. The Texas-based partnership reported 20.1% YoY and 30.2% YoY revenue and EBITDA growth in 1Q18. For details on ETP’s 1Q18 performance, see Energy Transfer Partners Beats Analyst Estimates Yet Again

For post-earnings analysis of Plains All American Pipeline (PAA) and Western Gas Partners (WES), see Higher Permian Volumes Drove Plains All American’s 1Q18 Results and Western Gas Partners: 1Q18 Earnings in Line with Estimates.