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EPD Announces Q4 Earnings, Expected 2019 Distribution Growth Rate

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Jan. 31 2019, Published 9:32 a.m. ET

EPD’s fourth-quarter results

Enterprise Products Partners (EPD) reported its fourth-quarter earnings results today. The company’s distributable cash flow for the quarter rose 29% to $1.617 billion from $1.257 billion in the previous year’s quarter.

Enterprise Products’ adjusted EBITDA for the fourth quarter was $1.867 billion, which exceeded analysts’ consensus estimate by ~1.0%. Strong liquid and natural gas pipeline volumes contributed to the company’s results in the quarter.

The graph above shows Enterprise Products Partners’ EBITDA and per-unit distributions over the last four years.

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The gross operating income of Enterprise Products’ NGL Pipeline & Services segment rose 11% YoY (year-over-year) in the fourth quarter. The company’s Crude Oil Pipelines & Services segment’s gross operating income, including mark-to-market gains on financial instruments, rose to $644 million in the quarter from $296 million in the fourth quarter of 2017.

The gross operating income of EPD’s Natural Gas Pipelines & Services segment rose 47% YoY, and the gross operating income of EPD’s Petrochemical & Refined Products Services segment rose 48% YoY in the fourth quarter.

2019 distribution guidance

Enterprise Products Partners also announced its expectations for 2019 distributions. The company expects to raise its distributions by $0.0025 per unit in each quarter of 2019. This per-quarter increase remains unchanged from 2018 and implies a 2.3% yearly rise over 2018.

Enterprise Products Partners also announced a $2 billion unit buyback program. The company hasn’t set a time limit for the completion of the buyback program.

Enterprise Products Partners reduced its distribution growth rate in the third quarter of 2017. One objective for it was to achieve self-funding of the equity portion of its growth capex. A.J. Teague, CEO of the general partner of Enterprise, said, “I am pleased to announce that we accomplished this objective a year early by self-funding over 50 percent of our 2018 growth capital investments and acquisitions of approximately $4 billion.”

Magellan Midstream Partners (MMP) also announced its fourth-quarter earnings results today. Learn how Kinder Morgan (KMI) fared in Q4 in Highlights from Kinder Morgan’s Fourth-Quarter Earnings.

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