Plains All American Pipeline (PAA) Tops Q3 EPS by 13c, Revenues Beat

Plains All American Pipeline (NYSE: PAA) reported Q3 EPS of $0.46, $0.13 better than the analyst estimate of $0.33. Revenue for the quarter came in at $5.83 billion versus the consensus estimate of $5.42 billion.

Summary Highlights

• Reported net income for the quarter of $143 million
• Delivered third-quarter 2020 Adjusted EBITDA of $682 million
• Completed the sale of LA Basin Terminals (closed October 15, 2020) for approximately $200 million (brings year-to-date asset sales proceeds to approximately $450 million)
• Increased full-year 2020 Adjusted EBITDA guidance to +/- $2.585 billion (increase of $85 million, or 3%)
• Provided preliminary estimate for 2021 Adjusted EBITDA of +/- $2.2 billion (assumes a $50 million contribution from the Supply & Logistics segment, and is net of the LA Basin Terminals sale and $600 million or more of additional asset sales targeted in 2021)
• Provided preliminary estimate for 2021 Free Cash Flow after distributions of roughly $300 million, or $900 million or more when including the benefit of proceeds from additional asset sales targeted in 2021
• Announced $500 million Common Equity Repurchase Program intended to be utilized as an additional method of returning capital to investors

“We delivered third-quarter results favorable to our expectations and raised our full-year 2020 guidance, which is now in-line with our beginning of the year pre-COVID expectations,” stated Willie Chiang, Chairman and CEO of Plains. “We have continued to execute across each of our key initiatives: operating safely and reliably, maximizing Free Cash Flow after distributions, reducing leverage, minimizing capital investment, optimizing our assets, streamlining our organization and reducing costs throughout the business.”

Mr. Chiang continued, “Our current equity valuation does not reflect the strength of our asset base or the long-term durability of our business, and we have reached an inflection point where we expect to generate meaningful levels of Free Cash Flow after distributions. Given the combination of these factors, today we announced a $500 million common equity repurchase program to be used as an additional method of returning capital to investors. In addition to reducing debt, we believe it is appropriate to allocate a portion of our Free Cash Flow after distributions to invest in our equity.”

For earnings history and earnings-related data on Plains All American Pipeline (PAA) click here.

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