HOUSTON (Reuters) - Pipeline operator Magellan Midstream Partners LP’s (MMP.N) profits rose in the second quarter because of increased tariff rates on pipelines for refined products and stronger commodity prices, the company said on Thursday.
Houston-based Magellan posted earnings of $1.11 a unit, six cents above the average estimate of analysts, according to Refinitiv data. It boosted its annual distributable cash flow guidance by $40 million to $1.22 billion for this year.
Shares rose $1.12 to $67.26 in morning trading.
The company’s earnings were in line with other pipeline operators, including Enterprise Products Partners LP (EPD.N) and Kinder Morgan (KMI.N), which beat Wall Street’s second-quarter estimates as earnings grew amid higher pipeline fees and volumes.
Magellan’s revenue from moving and storing crude rose $17.6 million because of fees from new storage and dock capacity at the Seabrook Logistics LLC export facility in the Houston area.
Rising crude volumes into the Seabrook facility offset lower average crude tariffs on its Houston distribution system and lower committed rates on its 275,000 barrel-per-day Longhorn pipeline, which runs from the Permian Basin to Houston.
For refined products, transportation and terminal revenue rose $15.2 million as it raised pipeline rates, with distillate demand 1% higher than in the second quarter of 2018.
Reporting by Collin Eaton in Houston; Editing by Bernadette Baum