Magellan Midstream Partners Profit Beats Expectations
HOUSTON, Aug 2 (Reuters) - Magellan Midstream Partners LP on Thursday reported quarterly profit that topped analyst expectations, driven by higher demand for its crude oil and refined products pipelines.
The Tulsa, Oklahoma, pipeline operator's second-quarter net income was $214.4 million, up 2 percent from the same period a year ago.
It posted earnings per share of $1.05 excluding special items. Analysts on average had expected earnings per share of $1.01 in the second quarter, according to Thomson Reuters I/B/E/S.
Revenue came in at $644.1 million, up from $619.4 million in the same period last year. Sales were boosted by "increased demand for our refined products and crude oil infrastructure," Magellan Chief Executive Michael Mears said in a statement.
The company’s crude oil operating margin rose by $46.2 million to a quarterly record of $152 million.
Magellan said it plans to spend $900 million in 2018 and 2019 and $200 million in 2020 on projects including expanding its West Texas refined products pipeline system. It plans to spend $50 million building an eight-mile refined products pipeline between its facilities in Galena Park and east Houston in southeast Texas.
Construction of a new dock will significantly increase crude oil export capabilities at its Seabrook Logistics joint venture with LBC Tank Terminals LLC in Houston, Magellan said.
Magellan said it has received material for a refined products pipeline that will run from east Houston to Hearne, Texas, and expects to begin construction in September. It expects to receive steel for its crude oil pipeline in the Delaware Basin in West Texas in the fourth quarter.
Both pipelines are expected to come online in mid-2019.
The company is weighing some $500 million in other potential expansion projects and acquisitions. It also raised its annual guidance for 2018 distributable cash flow to $1.1 billion from its previous guidance of $1.05 billion.
(Reporting by Collin Eaton, Editing by Franklin Paul and Meredith Mazzilli)
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