NuStar Goes Against Wall Street Predictions, Reports Tumbling Profits

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San Antonio-based company, NuStar Energy, posted profits for the second quarter totaling $40 million, a decrease of 5.6 percent. The drop reportedly negated previous Wall Street predictions.

NuStar, a master limited partnership that owns pipelines, storage facilities, and terminals, received 52 cents per share. This is down from the 54 cents per share earned during the same quarter last year when the company made profits totaling $42.4 million.

A group of 12 analysts surveyed by the Thomson Financial Network estimated that NuStar would earn 50 cents per share. Usually limited partnerships allot extra cash to unit holders. In the second quarter, NuStar returned $92.8 million to investors which covered its projected $1.09 per share.

In a news release, NuStar president and CEO Brad Barron said, “As you can see, we have the right assets to withstand this current downturn in the crude markets,” he continued, “we remain on track to cover the distribution for the full-year due to the continued strength of our core, diversified fee-based operations.”

On Monday, NuStar’s stock closed at $49.41 per share, a decrease of 1.5 percent for the day. Just last year, it was $55.05 per share. Stock prices of limited partnerships have followed in-step with crude oil prices: down in 2015, but on the rise in 2016.

In 2015, a record supply of crude from the Eagle Ford Shale in southern Texas spread through NuStar’s own system. This improved the company’s 2015 activity to record heights. This year, sliding crude prices have caused NuStar to circulate less Eagle Ford oil, but has seen some benefits from the large capacity of crude oil in storage across the United States. NuStar saw an improvement in the second quarter because of 1.1 million barrels of storage leased at its Piney Point, Maryland location.

Roughly 8,700 miles of pipeline belong to NuStar. The company also holds 79 terminal and storage centers that hold and distribute crude, refined products, and specialty liquid products. NuStar has operations across North America in the U.S., Canada, Mexico, and the Netherlands, and in the United Kingdom.

Article written by HEI contributor Briana Steptoe.

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