Vicki Vaughan | San Antonio Express-News
SAN ANTONIO — Six months into his tenure as CEO of NuStar Energy LP, Brad Barron has made good on his promise to investors.
The pipeline partnership achieved what Barron said was the “biggest goal,” fully covering NuStar’s distribution to unitholders, by 1.1 times.
Not since the third quarter of 2011 has NuStar been able to cover its distribution, and the company is “well-positioned” to cover its distribution for 2014, Barron said.
“Our second-quarter results are the strongest we’ve reported in some time,” Barron said in a conference call Friday with analysts, as all three of the company’s operating segments “continued to perform well.”
More crude oil handled in its pipeline system in the Eagle Ford Shale and a dock expansion in Corpus Christi helped drive improved results for NuStar Energy LP in the second quarter, the company said.
The pipeline partnership’s net income jumped 67 percent in the quarter to $55.4 million, compared with $33 million for the same period a year ago.
NuStar earned 56 cents a share, beating analysts’ estimates that it would earn 46 cents a share.
NuStar’s units rose $1.15 on the news to close near a 52-week high of $65.35 in New York Stock Exchange trading.
The quarterly results “reaffirm (a) turnaround,” JP Morgan Securities analyst Jeremy Tonet said in a note to clients.
“The new management team has executed admirably during its first two quarters at the helm,” Tonet said.
In May, NuStar completed the first phase of its South Texas Crude Oil Pipeline expansion in the Eagle Ford Shale. Throughputs, or crude oil handled by the system, were higher than expected, the company said.
In addition, the company set a single-vessel loading record of 750,000 barrels of crude at its Corpus Christi North Beach Terminal.
Both were “significant milestones” for the company, Barron said.
Distributable cash flow available to limited partners rose in the quarter to $93.6 million, or $1.20 a unit, compared with $56.8 million, or 73 cents, for the year-earlier period.
Net income available to limited partners jumped to $43.6 million, or 56 cents a unit, compared with $21.6 million, or 28 cents a unit, for the same period a year ago.
NuStar’s board declared a second-quarter distribution of $1.095 a unit to be paid Aug. 11 to shareholders of record on Aug. 6.Second-quarter net income for NuStar GP Holdings LLC, which holds a general partner interest in NuStar Energy, rose to $15.8 million, or 37 cents a unit, compared with $12.6 million, or 29 cents a unit, for the year-earlier period.