Magellan (MMP) To Report Q3 Earnings: What's In The Cards?
Zacks Investment Research | Oct 28, 2019 12:10AM ET
Magellan Midstream Partners, L.P. (NYSE:MMP) is set to report third-quarter 2019 results on Thursday Oct 31, before the opening bell.
The current Zacks Consensus Estimate for the to-be-reported quarter is pegged at earnings of $1.08 on revenues of $678.8 million.
Let’s delve into the factors that might have influenced the partnership’s performance in the September quarter.
Factors at Play
Revenues from Magellan Midstream’s Refined Products segment came in at $490 million in the second quarter, up from $442.4 million recorded in the year-ago period, a trend that most likely continued in the third quarter because of a 4.3% tariff hike in July.
With fee-based, low risk activities comprising 85% of Magellan Midstream’s operating margin, the transporter of gasoline and diesel fuel is less susceptible to volatile commodity prices. This is expected to have driven the firm’s performance in the third quarter.
However, Magellan Midstream’s spate of project cancellations is a cause for concern. After the cancellation of its Texas-based Wink-to-Crane pipeline and the shutdown of its ammonia pipeline, the firm also backed out from developing the Permian-Gulf Coast pipeline. As this partnership scrapped a number of projects, investors are worried that the headwinds might reflect on Magellan Midstream’s third-quarter cash flows.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Magellan Midstream this season. The combination of a positive Zacks Investment Research
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