Oil boost helps Magellan's bottom line
A growing flow of crude oil along Magellan Midstream Partners' pipelines boosted its second-quarter results, the company announced Thursday.
The company reported a second- quarter net income of $254 million, or $ 1.11 a unit, compared to $ 214 million, or 94 cents a unit, in the second quarter of 2018. Revenues increased to about $ 702 million, compared to about $644 million in the year- ago quarter.
Magellan's bottom line was helped during the quarter by additional revenue gathered for transporting crude oil on pipelines and by an improved commodity pricing environment.
The company nearly doubled the amount of oil shipped on lines it solely owns during the second quarter to 80.5 million barrels, up from 49.9 million barrels in the year-ago period.
Volumes also grew on lines it owns through joint ventures, including the Saddlehorn Pipeline, which carries crude from northeast Colorado's Denver-Julesburg Basin to Cushing. In the second quarter of 2019, the line transported 13.4 million barrels, compared to 6 million one year ago.
Officials stated this week the company continues to work on future new and expansion projects at marine terminals in Galena Park and Pasadena, Texas, additional storage and export facilities at Seabrook, Texas, and a storage project at Midland, Texas.
The company is testing its East Houston-to-Hearne refined products pipeline in Texas and plans to expand capacity on the Saddlehorn Pipeline before the end of 2020, expecting to spend about $1.1 billion this year and $ 150 million in 2020 to carry out those plans.
Based on 2019 results so far, Magellan also reported Thursday it is increasing its earnings financial guidance for the year to $1.22 billion.
“Magellan continues to produce strong results, with each of our business segments generating higher operating margin than the year-ago period,” Magellan CEO Michael Mears stated in Thursday's earnings release.
“Magellan's solid fundamentals and disciplined approach have proven to be an effective combination to produce consistent and stable results over time while managing our business for the long term.”