Source: Spectra Energy Corp. 

Spectra Energy Corp. (SE) and its master limited partnership Spectra Energy Partners, LP (SEP) reported Q4 earnings today, and the two stocks continue to head higher. But with natural gas prices on the rise, are these companies headed for tough times? Here's what you need to know.

The numbers
Spectra Energy Corp. exceeded expectations on both its top and bottom line. Sales came in at $1.56 billion, a solid $80 million above analyst estimates and 16% higher than last year. On the bottom line, Spectra Energy Corp. pulled in adjusted earnings per share (EPS) of $0.41, $0.03 above estimates and $0.09 above Q3 2012 earnings.  

Master limited partnership Spectra Energy Partners, LP also recorded growth, with Q4 EBITDA hitting $368 million. Spectra Energy Corp. finalized its dropdown of U.S. transmission, storage, and liquid assets to Spectra Energy Partners, LP this past quarter, so year-over-year comparisons will be increasingly meaningful from now on. In Q4 2012, Spectra Energy Partners, LP, pulled in $316 million of EBITDA. 

For a bit of perspective, here's how Spectra Energy Corp.'s overall sales and adjusted EPS have fared over the past three years.

SE Revenue (Annual) Chart

SE Revenue (Annual) data by YCharts.

While Spectra Energy Partners, LP sales have soared, that's simply evidence of more asset dropdowns. With solid but unremarkable sales elsewhere, you've got to look beyond numbers to know why these shares have soared over the past five years.

SE Chart

SE data by YCharts.

Natural gas. Natural gas. Natural gas.
Spectra Energy didn't just invest in natural gas early on -- it came into existence neck-deep in the stuff as a 2007 Duke Energy Corporation (DUK 2.41%) spinoff. And while that might've meant a leaner, meaner balance sheet for Duke Energy Corporation heading into the global financial crisis, few would argue that Spectra Energy got the better end of the division deal. Duke Energy Corporation has been undergoing a massive $9 modernization project, a large portion of which involves retiring costly and cumbersome coal plants in favor of new natural gas facilities. Check out the video below for visual proof of Duke Energy Corporation's literal self-destruction.

Source: Duke Energy Corporation 

Mover and shaker
But natural gas alone isn't enough to explain Spectra Energy's soaring shares. Even if Duke Energy Corporation converted all of its power plants to natural gas tomorrow, it wouldn't have what Spectra Energy has. The company's true competitive moat is its focus on transmission and infrastructure. While rising natural gas prices put margin squeezes on power producers and pit other energies like nuclear back into the battle, Spectra Energy can sit back and continue to enjoy the sweet cash flow from midstream operations.

The company allocated $6 billion to capital expenditures in 2013 and plans to add on another $7 billion in the coming year. Overall, it's got $25 billion in near- to mid-term growth projects lined up, meaning substantial growth opportunity as it continues to pull profits from current operations. 

Source: NextEra Energy.

For example, the company is partnering up with NextEra Energy (NEE 0.45%) to bring Florida its third major natural gas pipeline. Officials continue to push Spectra's and NextEra Energy's project through the regulatory pipeline, and the companies expect the project to be up and running to meet Floridian's growing demand by mid-2017. 

Room to grow?
In the words of Spectra Energy President and CEO Greg Ebel, "On virtually all fronts, 2013 was a very strong year for Spectra Energy." Ebel's right, and his company's stock performance continues to show it. Spectra Energy is increasingly solidifying its role in America's energy infrastructure, and the company should continue to excel in the years to come.