Spectra Energy (SE) Earnings Beat, Revenues Miss In Q3
Zacks Investment Research | Nov 01, 2016 10:53PM ET
Premier natural gas company Spectra Energy Corp. (NYSE:SE) reported third-quarter 2016 earnings per share from continuing operations of 31 cents, which beat the Zacks Consensus Estimate of 26 cents. The bottom line also improved from the year-ago quarter earnings of 23 cents per share.
The company’s operating revenues of $1,075 million fell 2.5% from the year-ago level of $1,103 million and also came in below the Zacks Consensus Estimate of $1,140 million.
Operational Analysis
Spectra Energy Partners: The segment posted quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) of $502.0 million, down 2.9% from the year-ago quarter. The decrease mainly stemmed from the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned till Oct 2015. Earnings from these NGL pipeline interests are now reflected in the Field Services segment.
Distribution: The segment reported a year-over-year increase of 10% in EBITDA to $77.0 million from $70.0 million. The upside was mainly driven by incremental earnings from the 2015 Dawn-Parkway expansion project and higher storage margins.
Western Canada Transmission & Processing: The segment witnessed an EBITDA of $109.0 million, down 6.8% from the year-earlier level. The downside is attributable to lower gathering and processing revenues.
Field Services: Spectra Energy reported that the 50% it owns of the Field Services segment generated earnings of $15 million in the third quarter, which compared favorably with a loss of $29 million in the year-ago quarter. Favourable contract realignment efforts, continued cost-saving initiatives and asset growth contributed to the improvement.
Production and Price Realizations
The company produced NGLs of 403 thousand barrels per day (MBbl/d), down from the year-ago quarter level of 421 MBbl/d. Price of NGLs increased 7.1% and averaged 45 cents per gallon, while crude oil costs declined 3.2% and averaged approximately $44.94 per barrel, both on a year-over-year basis. Natural gas was sold at $2.81 per million British thermal units (MMBtu) as against $2.77 per MMBtu in the third quarter of 2015.
SPECTRA ENERGY Price, Consensus and EPS Surprise
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