BORCO Terminal. Source: Buckeye Partners

Buckeye Partners (BPL) reported excellent second-quarter earnings; its growth projects are really paying off. The company saw strong income growth in both its domestic and international segments, which helped to fuel its successful quarter. Let's take a closer look at the numbers as well as what to expect.

The numbers that matter
Net income for the quarter came in at $76.4 million, or $0.72 per unit, well ahead of last year's $54.4 million, or $0.55 per unit. After adjustments, Buckeye produced distributable cash flow of $106.7 million, which was more than enough to cover its $104.3 million distribution to investors in the quarter. The company was able to end the quarter with a distribution coverage ratio of 1.02 times and through the first six months the ratio is 1.12 times. Buckeye has been doing a lot better covering its distribution, which is why it was able to raise it by another 2.4% this quarter.

Buckeye is really starting to benefit from all the capital it has spent the past few years. This past quarter it was able to capitalize on the U.S oil-by-rail boom to sign long-term contracts at its Chicago complex for crude oil storage. In addition to this, its plan to transform the former Chevron (CVX 1.20%) Perth Amboy facility in the New York Harbor is starting to bear fruit. The company signed a long-term contract for 1 million barrels of refined petroleum product storage at the facility. This is a prime example of what Buckeye does best. It acquires underutilized terminal and storage assets from major petrochemical companies and maximizes the value of the assets in ways the former parent never could have done.

Finally, Buckeye saw continued strength at its international operations, as it's starting to see the benefits of its expansion efforts. Revenue in that segment jumped to $144.4 million from just $50.4 million last year. Meanwhile, adjusted EBITDA jumped 22% going from $30.5 million all the way to $37.2 million. Its international operations should only grow stronger over time as the company continues to develop its crown jewel BORCO terminal in the Bahamas.

A look ahead
Buckeye continues to invest prudently with an eye toward the bottom line. So far this year, the company has spent $129.7 million on projects either geared toward expansion or reducing costs throughout its system; it invested heavily to grow its most recent acquisitions, Perth Amboy and BORCO. The company still has a number of opportunities to continue to expand both assets, as well as opportunities throughout its portfolio, such as its recent projects in Chicago.

However, its next phase of meaningful growth will likely come from future acquisitions. The company has been very active over the past few years, having bought $3 billion in assets since 2008. Buckeye has been very quiet since its $260 million deal with Chevron last year, so it wouldn't surprise me to see the company make a deal before the end of the year.

Final Foolish thoughts
Buckeye continues to thrive as its previous acquisitions are really starting to fuel its business. The only area of concern right now is its natural gas storage business which continues to drag on its earnings. Given that the company has successfully turned around its energy services segment, it is hoped that it will be only a matter of time before it can turn its storage business around as well. The bottom line, though, is that Buckeye is very well positioned to continue to take advantage of the continued growth in oil production, both in the U.S and abroad.