It has been about a month since the last earnings report for Energy Transfer Partners, L.P. ETP. Shares have lost about 7.6% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is ETP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Fourth-Quarter 2017 Earnings

Energy Transfer Partners delivered fourth-quarter 2017 earnings of 36 cents per limited partner unit, surpassing the Zacks Consensus Estimate of earnings of 28 cents. The better-than-expected results can be attributed to stellar performance of Crude Oil Transportation and Services segment.

Quarterly revenues increased to $8,610 million from $6,526 million a year ago. Further, the top line surpassed the Zacks Consensus Estimate of $8,066 million.

Quarterly Cash Distribution

Last month, Energy Transfer Partners announced fourth-quarter distribution of about 57 cents per unit ($2.26 per unit annualized), unchanged from the prior quarter. This quarterly distribution was paid on Feb 14, 2018 to unit holders of record as of Feb 8, 2018.

EBITDA, Operating Income and Net Income

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter were $1,938 million compared with $1,485 million a year ago. The improvement of 30.5% can be attributed to strong performance from Crude Oil Transportation and Services segment which delivered EBITDA of $544 million, surging a whopping 129.5% from the year-ago quarter. The company’s Crude Oil Transportation and Services segment benefited from the Bakken Pipeline project (which entered into service in the second quarter of 2017) along with strong crude oil throughput volumes.

Further, the Midstream segment generated EBITDA of $393 million, surging 52.3% from third-quarter 2016. Midstream segment benefited from higher production volumes in the Permian, South Texas and North East regions. It was aided further by the acquisition of the outstanding units of Houston-based subsidiary, PennTex Midstream Partners LP. Higher non-fee-based processing margins and increased fee-based revenues also bolstered the results when compared with the prior-year quarter.

NGL Transportation and Services segment reported EBITDA of $433 million in the quarter under review compared with $424 million in the prior-year quarter. Increased NGL transportation and fractionation volumes margins drove the results of NGL Transportation and Services segment. However, the results were partly offset by lower refined products terminal volumes.

Interstate transportation/storage segment also reported higher EBITDA of $298 million compared with $269 million recorded year ago. However, results from the intrastate transportation/storage segment were slightly weaker at $146 million as compared with $152 million in the year-ago quarter.  EBITDA from the all other segments also decreased to $124 million compared with $145 million in the year-ago quarter.

The partnership reported operating income of $199 million against an operating loss of $139 million in fourth-quarter 2016 on the back of higher revenues despite increasing costs.

Notably, the partnership reported total expense of $8,411 million in fourth-quarter 2017, reflecting an increase of 26.2% from the prior-year quarter. Higher expenses can primarily be attributed to increased costs of products sold.

Energy Transfer Partners reported a net income of $1,097 million in the reported quarter, skyrocketing 426.5% from the net loss of $336 million in the year-ago quarter. The massive rise in the partnership’s net income was driven by higher operating income and deferred tax benefit from the recent tax reform.

Distributable Cash Flow

Distributable cash flow of $1,343 million was higher than the prior-year quarter level of $958 million. The 40.2% increase in the distributable cash flow improved the partnership’s distribution coverage to $1.30x compared with 1.23x in the year-ago quarter.

Balance Sheet

As of Dec 31, 2017, Energy Transfer Partners had long-term debt (less current maturities) of $32,687 million. Debt-to-capitalization ratio was about 48.9%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter compared to one lower. In the past month, the consensus estimate has shifted by 53.6% due to these changes.

Energy Transfer Partners, L.P. Price and Consensus

Energy Transfer Partners, L.P. Price and Consensus | Energy Transfer Partners, L.P. Quote

VGM Scores

At this time, ETP has an average Growth Score of C, however its Momentum is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.

Outlook

Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, ETP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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