Pipeline to Profits is Clogged (EPD, KMP, PAA, BSR)

Enterprise Products Partners LP (NYSE:EPD) reported first quarter earnings of $237.3 million (earnings per unit of $0.41) on revenues of $3.42 billion. In the first quarter of 2008, the company reported earnings of $272 million, per unit earnings of $0.51, and revenues of $5.68 billion. The 40% drop in revenues was attributed to lower commodity prices during the first quarter of 2009.

Analysts expected first quarter earnings per unit of $0.36 on revenues of $5.11 billion. Enterprise said it lost about $21 million due to the continuing effects of Hurricanes Gustav and Ike, and the hurricanes also reduced distributable cash flow by about $38 million. Distributable cash flow totaled $383 million in the first quarter of 2008, compared with $343 for the 2009 first quarter.

The company’s performance pretty much matched that of Kinder Morgan Energy Partners, L.P. (NYSE:KMP), although transportation volumes rose slightly for Enterprise’s crude oil, petrochemical, and natural gas pipelines. Plains All American Pipeline LP (NYSE:PAA) reports May 7th and analysts expect unit earnings of $0.83 on revenues of $5.5 billion. That may be a stretch, given what’s happened with Kinder Morgan and Enterprise.

Enterprise shares are up more than 2.5% in pre-market trading this morning, while Kinder Morgan is down less than 1%. Neither Plains nor the pipeline ETN, BearLinx Alerian MLP Select Index has not traded yet today.

Paul Ausick
April 27, 2009