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Analyzing ETE and ETP’s First-Quarter Earnings and Outlook

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Analyzing ETE and ETP’s First-Quarter Earnings and Outlook PART 1 OF 7

Which Segment Drove Energy Transfer Partners’ Q1 Performance?

Crude oil transportation and services

Energy Transfer Partners (ETP) posted strong earnings growth in the first quarter and beat the earnings estimate. In this series, we’ll discuss Energy Transfer Partners’ first-quarter earnings growth drivers and the outlook for the rest of the year. Let’s start with an analysis of the segment-wise operating performance.

Which Segment Drove Energy Transfer Partners’ Q1 Performance?

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The Crude Oil Transportation and Services segment continued to be Energy Transfer Partners’ top performing segment in the first quarter. The segment posted 148.1% YoY EBITDA growth in the first quarter. The EBITDA growth was driven by the contribution from the Bakken Pipeline project, higher margins in the crude oil acquisition and marketing business, and strong crude oil throughput volumes, particularly from the Permian Basin. There was a higher operating expense related to recent projects placed into service.

Midstream segment

The Midstream segment, which is mainly involved in natural gas gathering and processing, posted 17.8% YoY EBITDA growth in the first quarter. The segment benefited from higher commodity-linked margins due to higher crude oil and NGLs prices and strong Permian volumes. There was a decline in the throughput volume in North Texas, Ark-La-Tex, and the Mid-Continent regions.

NGLs and Refined Products Transportation and Services segment

The NGLs and Refined Products Transportation and Services segment reported 18.4% YoY EBITDA growth in the first quarter. The segment saw a strong operating performance across all of its businesses including transportation, fractionation, terminaling, and marketing. However, there were higher operating expenses.

Interstate Transportation segment

The Interstate Transportation segment posted 21.9% YoY adjusted EBITDA growth. The segment’s first-quarter performance was mainly driven by the partial placement of the Rover Pipeline project into service.

Intrastate Transportation segment

The Intrastate Transportation segment reported 13.6% YoY EBITDA growth in the first quarter mainly driven by higher realized natural gas sales. There was a decrease in storage and transportation margins.

Next, we’ll discuss the distribution outlook for Energy Transfer Partners and Energy Transfer Equity (ETE).

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