Zacks Investment Research downgraded leading master limited
Williams Partners L.P.
) to Zacks Rank #5 (Strong Sell) on Mar 6.
Why the Downgrade?
Williams Partners witnessed sharp downward estimate revisions
after reporting disappointing fourth-quarter 2012 results. In
fact, the partnership delivered negative earnings surprises in
the last 4 quarters with an average miss of 24.13%.
On Feb 20, 2013, Williams Partners registered fourth-quarter 2012
earnings of 42 cents per limited-partner unit, missing the Zacks
Consensus Estimate of 52 cents. Earnings also deteriorated 60%
from the year-ago profit level of $1.05.
Lower natural gas liquid (NGL) margins and higher costs related
to developing new businesses purchased earlier in the year were
responsible for the fall in earnings.
Consolidated adjusted segment profit was $449.0 million, down
approximately 17.2% from the year-ago level of $542.0 million. In
particular, Midstream Gas & Liquids segments' profit
decreased 32.4% year over year to $246.0 million.
Notably, Williams Partners' distributable cash flow (DCF)
attributable to the partnership's operations in 2012 was $1.49
billion against $1.65 billion recorded in the year-ago period.
For 2013, most of the estimates (8 out of 10) were revised
downward over the last 30 days, lowering the Zacks Consensus
Estimate by 12.28% to $2.00 per unit.
Other Stocks to Consider
Not all energy stocks are performing as poorly as Williams
Partners. The stocks of
Range Resources Corp
NGL Energy Partners LP
) are worth considering. All three carry a Zacks Rank #1 (Strong
ENERPLUS CORP (ERF): Free Stock Analysis
NGL ENERGY PART (NGL): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
WILLIAMS PTNRS (WPZ): Free Stock Analysis
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