Williams Partners Earnings Miss Ests, Revs Top - Analyst Blog

By
A A A

Williams Partners L.P. ( WPZ ) registered fourth-quarter 2013 earnings of 12 cents per limited-partner unit, lagging the Zacks Consensus Estimate of 40 cents. Earnings also deteriorated 71.4% from the year-ago profit level of 42 cents. The downcast figures were due to loss of production from the closed Geismar olefins plant which will resume operation not before mid 2014. Apart from that, lower natural gas liquids (NGLs) margins and higher operating costs from the Northeast G&P segment also added to the woe.

Full-year 2013 earnings decreased 23.2% year over year to $1.45 per unit and lagged the Zacks Consensus Estimate of $1.69.

Quarterly total revenue decreased 11.1% year over year to $1,616.0 million but surpassed the Zacks Consensus Estimate of $1,483.0 million. Full-year 2013 revenues came in at $6,685 million, down 8.7% on an annualized basis. The results however surpassed the Zacks Consensus Estimate of $6,517 million.

Notably, Williams Partners' distributable cash flow (DCF) attributable to partnership operations in the reported quarter was $509 million against $405 million in the year-ago quarter. Recently, the partnership increased its quarterly cash distribution by 7.9% year over year to 89.25 cents per unit.

Segment Performance

Consolidated adjusted segment profit was $485.0 million, up 8.0% from the year-ago level of $449.0 million.

Northeast G&P: The segment reported loss of $26 million compared with loss of $17 million in fourth-quarter 2012. The higher downside came from higher operating costs and depreciation.

Atlantic-Gulf: The segment reported profits of $166 million compared with $158 million in fourth-quarter 2012. The upside was primarily backed by higher transportation fee revenues and lower operating expenses.

West: Segmental profit was $186 million compared with $207 million a year ago. Lower volumes as a result of reduced ethane recoveries and an expired customer contract, were responsible for the decline.

NGL & Petchem Services: The segment reported profits of $16 million compared with $93 million in fourth-quarter 2012. The downside came from lower olefin product margins, primarily due to extended outage of the Geismar plant.

Guidance

Williams Partners reaffirmed its guidance for distribution per limited partner unit growth of 6% both in 2014 and 2015.

The partnership expects DCF of $2,350 million for 2014 and $2,785 million for 2015.

Adjusted segment profits are expected at $2,345 million for 2014 and $2,830 million for 2015.

Capital expenditures are estimated at $3,615 million for 2014 and $2,175 million for 2015.

In Conclusion

Williams Partners is an energy master limited partnership engaged in gathering, transportation, treating and processing of natural gas as well as fractionation and storage of NGLs. The general partner of the partnership is owned and managed by Williams Companies Inc. ( WMB ).

Williams Partners carries a Zacks Rank #3 (Hold). However, there are better-ranked stocks in the oil and gas sector such as Helmerich & Payne, Inc. ( HP ) and Matrix Service Company ( MTRX ), both of which have a Zacks Rank #1 (Strong Buy).



HELMERICH&PAYNE (HP): Free Stock Analysis Report

MATRIX SERVICE (MTRX): Free Stock Analysis Report

WILLIAMS COS (WMB): Free Stock Analysis Report

WILLIAMS PTNRS (WPZ): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: HP , MTRX , WMB , WPZ

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

33,110,376
  • $113.99 ▲ 1.77%
25,034,179
    $17.98 unch
24,486,872
  • $7.41 ▲ 2.07%
20,864,535
  • $7.39 ▼ 2.76%
18,600,501
  • $8.30 ▼ 0.36%
17,530,211
  • $8.14 ▲ 3.17%
17,299,208
  • $93.79 ▲ 2.74%
14,669,760
  • $25.78 ▼ 0.19%
As of 12/26/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com