Genesis Energy LP Earnings: Here’s Why the Stock is Rising Now

Genesis Energy LP (NYSE:GEL) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.16%.

Genesis Energy LP Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 12.82% to $0.34 in the quarter versus EPS of $0.12 in the year-earlier quarter.

Revenue: Rose 30.64% to $1.05 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Genesis Energy LP reported adjusted EPS income of $0.34 per share. By that measure, the company missed the mean analyst estimate of $0.37. It missed the average revenue estimate of $1.06 billion.

Quoting Management: Grant Sims, CEO of Genesis Energy, said, “We are pleased to announce another quarter and full year of record Available Cash before Reserves. Our measured, stable growth has allowed us to increase distributions to our unitholders for the thirtieth consecutive quarter, twenty-five of which have been 10% or greater over the prior year quarter, and none were less than 8.7%.
We are very excited as we enter 2013. Our existing businesses are performing consistent with our expectations. We expect to realize an increasing contribution in 2013 and into 2014 from a number of our organic projects, such as Walnut Hill, Natchez, Wink, Wyoming and Texas City. Our two largest growth projects announced to date, our SEKCO joint venture with Enterprise Products and our recently announced project around ExxonMobil’s Baton Rouge refinery complex, will contribute in 2014 and accelerate into 2015. We believe we are well-positioned, given the current available capacity in our offshore oil pipelines, to benefit in the latter part of this decade from the dramatically increasing level of development activity in the deepwater Gulf of Mexico.
Last week, we completed an offering of $350 million of senior unsecured notes. The proceeds were used to pay down borrowings under our revolving credit facility and for general partnership purposes. Subsequently, we have approximately $800 million of availability under our revolving credit facility. This allows us to comfortably be able to complete all of our announced projects without having to issue equity. As a result, we believe we are very well positioned to continue to achieve our goals of delivering low double-digit growth in distributions while increasing our coverage ratio and maintaining a better than investment grade leverage ratio, all without ever losing sight of our absolute commitment to safe, reliable and responsible operations.”

Key Stats (on next page)…

Revenue increased 11.86% from $942.33 million in the previous quarter. EPS decreased 12.82% from $0.39 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.33 to a profit $0.35. For the current year, the average estimate has moved up from a profit of $1.16 to a profit of $1.28 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)