This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

NuStar Energy Provides Interim Earnings Guidance For Second Quarter Of 2012

Stocks in this article: NS

NuStar Energy L.P. (NYSE: NS) today announced that second quarter earnings before interest, taxes, depreciation and amortization (EBITDA) results are expected to be significantly lower than the $160 million earned in the second quarter of 2011. Lower projected results in the company’s asphalt and fuels marketing segment and anticipated non-cash charges relating primarily to the announced sale of 50% of NuStar Energy’s asphalt operations are the main causes of the expected lower second quarter results.

Continued weak demand and lower gross margins are expected to cause the EBITDA of the company’s asphalt operations to be negative, which will obviously be significantly lower than the $55 million of EBITDA generated in the second quarter of 2011. In addition, the company’s fuels marketing operations are expected to generate a loss in the quarter primarily as a result of heavy fuel oil and bunker fuel inventories not being hedged for approximately two months in a declining commodity price market. All of this inventory is now fully hedged (effective May 25) and going forward the company intends for its heavy fuel oil and bunker fuel inventory volumes to remain hedged at all times.

As a result of these anticipated second quarter projections, effective June 29, 2012, the company obtained an amendment to the debt to EBITDA covenant in its debt agreements for the second and third quarters of 2012.

Second quarter EBITDA should also be negatively impacted by a substantial amount of non-cash charges. The company plans to write down the value of its asphalt refineries, including goodwill and intangible assets, as a result of the sale of 50% of its asphalt operations. These non-cash charges will impact second quarter EBITDA, but will not impact the debt to EBITDA covenant calculation in the company’s debt agreements.

“While we’re obviously disappointed with our second quarter results, we are taking steps that we are confident will help improve our earnings going forward,” said Curt Anastasio, NuStar’s President and CEO. “The asphalt joint venture we announced today is expected to deconsolidate our asphalt operations, which will allow NuStar to significantly reduce earnings volatility, reduce debt and provide additional opportunities to invest in stable, high-return, pipeline and terminal assets, while maintaining a 50% interest in a business that has the potential to generate significant cash flows as the U.S. economy improves.”

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs