Plains All American Posts Mixed Q3 Earnings, Expects 2 Deals To Enhance Permian JV

Plains All American Pipeline LP PAA reported third-quarter (Q3) 2023 revenue of $12.07 billion, missing the consensus of $14.5 billion.

Adjusted EPS of 35 cents (+6% Y/Y) beat the consensus of 26 cents. Adjusted EBITDA attributable to PAA rose 6% Y/Y to $662 million.

The crude Oil Segment Adjusted EBITDA rose 3% Y/Y to $553 million on higher tariff volumes, tariff escalations, and contributions from acquisitions. 

NGL Segment Adjusted EBITDA grew 15% Y/Y to $99 million, mainly aided by favorable NGL basis differentials and spot opportunities.

Operating cash flow stood at $85 million in the quarter.

"We closed two bolt-on acquisitions that complement our existing portfolio and enhance the service offering of our Permian JV," CEO Willie Chiang said.

"Recent geopolitical events remind us of the important role we play as a critical provider of infrastructure solutions offering affordable, reliable, and responsibly produced crude oil & NGLs across North America and reinforce our view that we remain well positioned today and going forward."

Distribution: PAA and PAGP announced quarterly cash distributions of $0.2675 per Common Unit ($1.07 on an annualized basis) and $0.2675 per Class A Share ($1.07 on an annualized basis), respectively.

The distributions will be payable on Nov. 14 to holders of the respective securities at the close of business on Oct. 31.

Management plans to recommend to the board of PAA GP Holdings LLC an annualized increase of 19% (or $0.20 per unit) to PAA's and PAGP's Q4 2023 distribution.

The move will increase the annualized rate to $1.27 from $1.07 per common unit and Class A share, payable in February 2024.

FY23 Outlook: PAA raised the outlook for attributable adjusted EBITDA to $2.60 billion - $2.65 billion from $2.45 billion - $2.55 billion.

Price Action: PAA shares are trading lower by 2.41% at $15.50 on the last check Friday.