Acquisitions Improve Buckeye’s Prospects

Article Excerpt

BUCKEYE PARTNERS L.P. $43 (New York symbol BPL; Income Portfolio, Utilities sector; WSSF Rating: Average) transports gasoline and other refined petroleum products through a 5,350-mile pipeline network in 16 states, mainly in the Northeast and Midwest. It also operates pipelines under contract for major oil companies, and owns oil and chemical storage terminals. Buckeye has expanded aggressively in the past two years, mostly through acquisitions. While that adds to its risk, these new assets are profitable and broadened its geographic reach. The extra cash flow has also let Buckeye increase its distributions for nine consecutive quarters. The current rate of $3.05 a unit yields 7.1%. In the three months ended June 30, 2006, revenue grew 9.4%, to $111.5 million from $101.9 million a year earlier, mostly due to acquisitions and higher pipeline rates. However, higher costs for electricity and maintenance cut earnings in the quarter to $24.2 million from $24.4 million. Buckeye issued new units to help pay for its recent acquisitions. Consequently,…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.