Earnings

Return to Article

Boardwalk Pipeline Partners 1Q Profit Falls 41 Pct

The Associated Press

HOUSTON (AP) — Boardwalk Pipeline Partners LP on Monday said its first-quarter profit fell 41 percent due to higher expenses related to expansion projects and increased operation, maintenance and interest expenses.

Net income fell to $52 million, or 29 cents per unit, compared with $88.1 million, or 68 cents per unit, in the prior-year period. Revenue climbed 13 percent to $223.4 million from $197.3 million during the year-earlier period.

Though transportation revenue was boosted by expansion projects, that revenue still missed expectations as issues at certain joints of pipe forced the company to operate those pipelines at reduced pressures. The rise in revenue was more than offset by higher expenses related to the expansion projects, such as depreciation and property taxes, which cut away at margins. Operation and maintenance expenses also climbed due to major maintenance projects. Interest expenses were on the rise from an increase in outstanding debt balances and lower capitalized interest.

Boardwalk said its first-quarter results were helped by special items, including an $11.2 million contract settlement gain and a $3.1 million gain related to a higher-realized value of certain derivatives associated with expansion projects.

In a survey by Thomson Reuters, analysts predicted a profit of 51 cents per unit on revenue of $249.4 million, on average. Analysts typically exclude one-time items.

The Houston-based limited partnership operates interstate transportation lines and storage pipeline facilities through its subsidiaries, Gulf Crossing Pipeline Co. LLC, Gulf South Pipeline Co. LP and Texas Gas Transmission LLC.

Shares of the company fell $1.71, or 7.6 percent, to $20.79 in afternoon trading.