Shell Midstream (SHLX) Q4 Earnings Miss Estimate, Sales Top

An Earnings Miss: Shell (LON:RDSa) Midstream Partners, L.P. (NYSE:SHLX) – a dropdown partnership formed by Royal Dutch Shell plc RDS.A – reported net income per limited partner unit of 45 cents, lagging the Zacks Consensus Estimate of 49 cents.

Estimate Revision Trend & Surprise History: The Zacks Consensus Estimate for the quarter has been unchanged in the last 30 days.

Shell Midstream has an excellent earnings surprise history. Before posting the earnings miss in Q4, the partnership delivered positive surprises in each of the prior four quarters, as shown in the chart below:

Revenue Came in Higher than Expected: Revenues of $142.3 million came above the Zacks Consensus Estimate of $130 million.

Key Stats: The partnership’s adjusted EBITDA was $178.7 million for the quarter.

As per Shell Midstream’s earnings release, distributable cash flow (DCF) available to limited partners for the fourth quarter was $129 million (providing 1.2x distribution coverage).

Shell Midstream declared a distribution of 40 cents per limited partner unit representing a 4.7% sequential increase and 20.1% rise over the fourth quarter of 2017.

Shell Midstream said throughput volumes on the 163-mile Mars offshore pipeline came in at 566 thousand barrels per day, while among the onshore pipelines, Zydeco carried around 704 thousand barrels per day.

At the end of 2018, the partnership had cash and cash equivalents of $208 million and total debt of $2.1 billion.

Zacks Rank: Currently, Shell Midstream carries a Zacks Rank #2 (Buy).

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

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