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Why Atlas Pipeline Partners (APL) Is Down Today

Stocks in this article: APL

NEW YORK (TheStreet) -- Atlas Pipeline Partners  (APL) was falling 4.52% to $31.58 on Tuesday afternoon after its posted a wider fourth-quarter loss. 

Atlas announced that it posted a $47.8 million loss for the fourth quarter, compared to a $6.9 million loss in the same period in 2012. The 2013 figure includes a non-cash impairment charge of $43.9 million. Adjusted EBITDA was $86.7 million, a 35% year-over-year increase, while distributable cash flow was $51.7 million, a 28% year-over-year increase from $40.4 million last year.

The company also noted that severe winter weather had an effect of an estimated $5 million for the quarter on distributable cash flow.

"This past year was another step forward for the partnership as we continue to grow the business," said CEO Eugene Dubay in the company's statement. "We are in more areas serving more producers and adding more infrastructure than at any other point in the history of the company. As we continue to diversify our operations, add talent, and de-risk the cash flows of the partnership, we are a stronger enterprise. Because of this, we are being presented with opportunities that we would not have had a chance to pursue in years prior."

Must Read: 5 Hold-Rated Dividend Stocks: NS, FTR, RWT, APL, AGNC

TheStreet Ratings team rates ATLAS PIPELINE PARTNER LP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ATLAS PIPELINE PARTNER LP (APL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • APL's very impressive revenue growth greatly exceeded the industry average of 2.4%. Since the same quarter one year prior, revenues leaped by 97.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $79.40 million or 30.18% when compared to the same quarter last year. In addition, ATLAS PIPELINE PARTNER LP has also vastly surpassed the industry average cash flow growth rate of -50.31%.
  • APL's debt-to-equity ratio of 0.73 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.80 is weak.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS PIPELINE PARTNER LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ATLAS PIPELINE PARTNER LP is currently extremely low, coming in at 12.51%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.67% is significantly below that of the industry average.
  • You can view the full analysis from the report here: APL Ratings Report

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