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Enterprise Products’ Earnings Are Expected to Rise 20% in Q4

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Jan. 24 2019, Updated 2:38 p.m. ET

EPD’s fourth-quarter results

Enterprise Products Partners (EPD) is scheduled to report its fourth-quarter results on January 31. Analysts expect its adjusted EBITDA to rise 20% YoY (year-over-year) to ~$1.8 billion, and fall sequentially from $1.9 billion. The graph below shows Enterprise Products Partners’ EBITDA over the last four years.

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EPD’s distributions

On January 15, Enterprise Products Partners announced a distribution of $0.435 per unit for the fourth quarter, representing a 0.6% sequential rise and EPD’s 58th consecutive distribution increase. Investors will likely be waiting for Enterprise Products’ guidance on its 2019 distribution during its fourth-quarter call.

While Enterprise Products Partners’ yield is ~6.3%, Magellan Midstream Partners (MMP), Plains All American Pipeline (PAA), and Kinder Morgan (KMI) have yields of 6.3%, 5.0%, and 4.4%, respectively.

Expected earnings drivers

WTI crude oil prices averaged at $60 per barrel in the fourth quarter—approximately $10 less per barrel than in the previous quarter but higher than the $55 per barrel seen in Q4 2017. Henry Hub natural gas prices averaged at $3.80 per million Btu (British thermal units) in Q4 2018, compared with $2.9 per million Btu in Q3 2018 and Q4 2017.

Stronger commodity prices, contributions from growth projects, and higher volumes should support Enterprise Products Partners’ earnings during the fourth quarter. Next, we’ll look at expectations for EPD’s segment in the fourth quarter.

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