Brookfield Infrastructure Partners LP (BIP 0.56%) recently reported less-than-stellar third-quarter results. However, that was mainly due to some temporary headwinds. That was something the company's management team wanted to make clear on the accompanying conference call where they discussed the underlying strength of the business and the positives they saw ahead.

1. Our underlying results were solid

Brookfield Infrastructure's profitability slipped during the third quarter, with its funds from operations (FFO) declining 8% overall, and 12% on a per-unit basis. Two main factors drove that decline: the sale of an electric transmission business in Chile (Transelec) and foreign exchange fluctuations.

A toll road with traffic blurring at night.

Image source: Getty Images.

Those two issues masked that the "financial results for Brookfield Infrastructure in the third quarter were solid," according to CFO Bahir Manios. He noted that earnings would have increased 8% on a constant currency basis due to "solid organic growth across the business driven by inflation indexation across the majority of our businesses, higher volumes delivered through our transport and energy networks, and the commission of growth projects into earnings." 

One of the highlights was its energy segment, where FFO leaped 23% year over year due to the strength of the company's natural gas pipeline joint venture with Kinder Morgan (KMI 0.51%). That business is thriving after Brookfield and Kinder Morgan took over full control a couple of years ago, which allowed them to restructure it and pursue expansion projects. The partners recently commissioned one new project that will significantly boost earnings and also secured another needle-moving expansion to fuel future growth.

2. We're about to hit the accelerator

While Brookfield's FFO has declined the past two quarters, a reacceleration is just up ahead. CFO Bahir Manios walked through what's driving that belief by stating:

Looking ahead, we are very well-positioned to generate strong FFO per unit growth of almost 20% on a run rate basis beginning in the second half of 2019. With the recent deployment of capital, this more than makes up for the FFO gap from our recent asset sale and capital raises. More importantly, the future upside in the acquired assets is expected to be substantial, and this will stand us in good shape to continue to grow our FFO in the future.

Brookfield is currently in the process of investing $1.7 billion into six acquisitions that will more than offset the lost income from the sale of Transelec. The company has already closed a couple of those deals, including the first part of its acquisition of Enbridge's (ENB -0.03%) Western Canadian natural gas gathering and processing business. Those deals should provide a jolt to its results in the fourth quarter. 

Meanwhile, the company expects to close the second phase of its Enbridge deal by the middle of next year, as well as some data centers in both the U.S. and Brazil and a gas pipeline in India over the coming months. Once those transactions close, they'll fuel 20% FFO growth in the near term while speeding up its organic growth rate in the years to come.

Several pipelines with the sun shining brightly.

Image source: Getty Images.

3. We have ample fuel to continue growing

Brookfield's recent spending spree enabled it to quickly put the capital it raised earlier in the year to work. However, at the same time it was reallocating those funds, it was also working to replenish its corporate liquidity. Manios stated on the call that "we enhanced our liquidity through a number of successful capital issuances, raising 700 million Canadian dollars [$528.4 million] in the Canadian debt and preferred share markets, which brought corporate liquidity to almost $2.5 billion at the end of October." That led the CFO to conclude that "with this level of liquidity, we're able to fully fund all our committed transactions and organic growth backlog."

As noted earlier, in addition to all the acquisitions, Brookfield has also been investing capital to expand its existing assets. Its natural gas pipeline partnership with Kinder Morgan, for example, will be spending $230 million on its most recent expansion project. Meanwhile, Brookfield's district energy business recently won deals to build two large-scale systems in Colorado and New York, which will require a $120 million investment. In addition to that, the company is pursuing expansions on its newly acquired natural gas distribution network in Colombia and sees opportunities to expand other recently acquired businesses. So by bolstering its liquidity during the quarter, the company has the funding it needs to build these projects as well as pursue other expansions and acquisitions.

Just a speed bump

This year has been a transitional one for Brookfield Infrastructure Partners as it rotates out of legacy assets like Transelec and reallocates that capital into several new opportunities that will grow earnings faster in the future. With those deals starting to close, the company has clear line of sight that its earnings will reaccelerate in the coming quarters. Meanwhile, it has plenty of fuel to continue growing at a fast pace in the years to come since it has ample liquidity to fund expansion projects that are in the pipeline, as well as other opportunities that may arise in the coming year. Because of that, the company's sell-off this year looks like a great opportunity for long-term investors to buy.