Zacks Investment Research downgraded
Williams Partners L.P.
) to a Zacks Rank #5 (Strong Sell) on January 8.
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WILLIAMS PTNRS (WPZ): Free Stock Analysis
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Why the Downgrade?
Williams Partners L.P. (WPZ) has witnessed sharp downward
estimate revisions after reporting disappointing third-quarter
2012 results. In fact, this natural gas midstream and pipeline
partnership has delivered negative earnings surprises in the last
3 quarters with an average miss of 25.8%.
On October 31, 2012, Williams Partners reported third-quarter
earnings per unit of 38 cents, missing the Zacks Consensus
Estimate of 55 cents and the year-ago earnings of 91 cents.
Lower natural gas liquid margins in the partnership's business
during the quarter resulted in the drastic year-over-year
deterioration. Higher costs related to the development of new
businesses purchased earlier in the year were no less
Earnings were mainly aided by higher fee-based revenues from the
partnership's Susquehanna Supply Hub area and Ohio Valley
Midstream area of the Marcellus Shale as well as in the recently
acquired Ohio Valley Midstream system. However, these positives
were more than offset by a 27.6% decline in the Midstream Gas
& Liquids segment. The Gas Pipeline segment reported profits
of $155.0 million, down 8.8% year over year.
The Zacks Consensus Estimate for 2012 decreased 1.9% to $2.08 per
unit over the last 60 days. For 2013 also, most of the estimates
were revised downward over the last 60 days, sinking the Zacks
Consensus Estimate by 3.5% to $2.45 per share.
Other Stocks to Consider
Not all energy stocks are performing as poorly as Williams
Partners. The following energy stocks with favorable Zacks Rank
are performing well and are worth considering. The stocks of
Lone Pine Resources Inc.
) are worth considering. Both carry a Zacks Rank #1 (Strong