After several challenging years, oil pipeline operator Plains All American Pipeline (NYSE:PAA) started bouncing back in 2018. Though the third quarter, the company's results were well ahead of forecast, which led it to boost its full-year guidance.

However, oil prices abruptly pulled back during the fourth quarter, which might have had some impact on the company's results. That's one of a few things investors should keep an eye on when the company reports earnings later this week.

Pipelines going over a blue sea and with a blue sky ahead

Image source: Getty Images.

1. See if earnings were on target

Thanks to its strong showing through the third quarter, Plains All American Pipeline boosted its full-year forecast. The company estimated that it would generate $2.55 billion in adjusted EBITDA, up 22.5% from 2017, and haul in $1.68 billion in distributable cash flow (DCF), a 28.5% year-over-year increase. After tallying $1.735 billion of EBITDA and $1.1 billion of DCF through the first nine months of the year, Plains All American's forecast implies that it should produce roughly $820 million of EBITDA and $580 million of DCF in the year's final period.

Investors should see if the company achieved that forecast. If not, they should look at what might have caused an issue. One area in particular to keep an eye on is its supply and logistics (S&L) business, which is highly sensitive to changes in oil prices. Given that crude crashed during the period, it's possible this segment underperformed.

2. Look for any changes to its 2019 forecast

Plains All American also issued preliminary guidance for 2019 when it reported its third-quarter results. At the time, the company projected that adjusted EBITDA would expand to around $2.8 billion this year, an increase of about 10% from 2018's level.

The company anticipates that the continued expansion of its fee-based transportation and facilities segments will drive growth this year, with earnings in those two business units expected to increase nearly 12%, more than offsetting the expectation that S&L earnings will be flat year over year at $350 million. However, given the plunge in crude prices, investors should see if the company makes any changes to this forecast given how oil price volatility can affect results in the S&L segment.

3. Check for any more new projects

After investing nearly $2 billion to expand its oil pipeline business last year, Plains All American was only on pace to spend $650 million on new projects this year, though the company expected this would increase to $1 billion as it sanctioned new projects. The oil pipeline operator recently did just that as the company and partners ExxonMobil and Lotus Midstream moved forward with the Wink to Webster Pipeline. Plains All American will build the 1 million barrel-per-day oil pipeline, which should start up in the first half of 2021 and help support Exxon's growth in the Permian.

The company also has several other projects in various stages of development that it could soon approve, which is something investors should watch this quarter. These include expanding its Red River and Diamond Pipelines as well as a potential reversal of the Capline system. Sanctioning these and other projects could enable the company to continue growing earnings at a healthy pace in the coming years.

A pipeline under construction

Image source: Getty Images.

4. Keep an eye out for a potential announcement regarding its parent

One notable trend in the midstream sector over the past couple of years is that companies have been working to simplify their structures to reduce costs. Plains All American and its parent, Plains GP Holdings, took a step in that direction in 2016 when they closed a simplification transaction that eliminated the costly management fees Plains All American paid to Plains GP Holdings.

However, many peers have recently taken things a step further by combining related companies into one single stronger entity. Given that Plains All American and Plains GP are among the few remaining holdouts, it's possible they'll make that move this year, so it's something investors should watch for this quarter.

Check out the latest Plains All American earnings call transcript.

All eyes are on the impact of lower oil prices

Plains All American Pipeline was having a banner year in 2018 as higher oil prices boosted drilling activities, causing more oil to flow through its assets. However, with crude prices plummeting during the fourth quarter, that could have affected both its earnings and outlook for 2019. If that's the case, it could weigh on the pipeline company's stock in the near term, unless it's able to offset it with good news elsewhere. However, with several potential catalysts on the horizon, the longer-term outlook for the company looks bright, suggesting that a post-earnings sell-off might be a good opportunity to buy.