It has been about a month since the last earnings report for Magellan Midstream Partners (MMP). Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Magellan Midstream due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Magellan Midstream Q2 Earnings and Revenues Miss Estimates
Magellan Midstream Partners, L.P. reported second-quarter 2020 adjusted earnings per unit of 65 cents, missing the Zacks Consensus Estimate of 73 cents as well as the year-ago profit of $1.20. Lower refined products transportation volumes and a decline in crude oil shipments due to coronavirus-induced shutdowns and disruptions hampered results.
Moreover, quarterly revenues of $460.4 million not only fell from the year-ago sales of $701.7 million but also lagged the Zacks Consensus Estimate of $596 million.
Segmental Performance
Refined Products: Revenues of $315.7 million were down from the year-ago period’s $534 million. Notably, total volumes shipped in the quarter under review were 105.3 million barrels compared with 132.4 million barrels a year ago. Operating margin from the segment declined to $171.4 million in the second quarter from $251 million in the corresponding period of 2019. The segment’s depreciation costs and general & administration expenses decreased year over year. Operating profit plunged 40.9% year over year to $99.8 million.
Crude Oil: Quarterly revenues grossed $146.2 million, down 13.5% year over year on the back of lower volumes. Total volumes shipped in the quarter were 47.7 million barrels, down from 80.5 million barrels a year ago. Operating margin contracted to $128.3 million from $163.2 million in the prior year. Operating profit of $100.9 million declined 23.5% year over year due to depressed volumes and margins.
DCF & Balance Sheet
Magellan Midstream’s distributable cash flow (DCF) for the second quarter summed $209.5 million, dropping 33.4% from the year-ago level.
Notably, on Jul 23, the partnership announced second-quarter cash distribution of $1.0275 per unit ($4.11 on an annualized basis), representing 1% annual growth. The amount is payable Aug 14 to its unitholders of record as of Aug 7.
As of Jun 30, 2020, the firm had cash and cash equivalents worth $2.86 million, and a long-term debt of $4.79 billion.