Enbridge Profit Beats Estimates as CEO Says Pace May Slow

Enbridge Inc., the largest transporter of Canadian crude to the U.S., reported first-quarter profit that exceeded analysts’ estimates as company executives said it won’t be able to keep up the “pace” of earnings for the rest of the year.

Excluding losses on commodity contracts and other one-time items, Enbridge earned 62 Canadian cents a share, 10 cents more than the 52-cent average of 15 estimates compiled by Bloomberg. Net income fell 4.2 percent to C$250 million ($249 million), or 31 cents a share, from C$261 million, or 34 cents, a year earlier, the Calgary-based company said in a statement today.

“Although we are pleased with that result, we don’t expect this pace will be maintained throughout the year,” Chief Executive Officer Al Monaco said during an earnings conference call today. The company reiterated its full-year adjusted earnings per share forecast of C$1.74 to C$1.90.

Enbridge owns and operates Canada’s largest oil pipeline network, spanning 24,738 kilometers (15,375 miles) and shipping more than 2.2 million barrels of crude and liquids a day, according to its website. The company is investing C$15 billion in the next three years to add capacity for 1 million barrels of Alberta crude, Monaco said in a speech in January.

Higher Throughput

Added production from Alberta’s oil sands and the Bakken Shale formation has prompted Enbridge to expand and reverse pipeline routes to refineries on the U.S. Gulf Coast and in Canada’s eastern provinces. The company’s Seaway pipeline, jointly owned with Enterprise Products Partners LP, is the only pipeline shipping crude to the Gulf Coast from the Cushing, Oklahoma, storage hub.

For the remainder of the year, earnings growth will be “moderate,” Chief Financial Officer Richard Bird said during the call. Capacity on the Seaway pipeline has been curtailed by limits on the ability of third parties to take product at some of the delivery points. Some of these constraints are expected to ease in the fourth quarter when a new facility in Houston begins operations, according to the statement.

Average deliveries on its liquids pipelines system rose 11 percent to 2.41 million barrels a day from a year earlier, according to the statement.

Enbridge rose 5 cents to C$47.60 at the close in Toronto. The shares have 13 buy, three hold and two sell ratings from analysts, according to data compiled by Bloomberg.

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