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Williams Partners L.P. (WPZ - Snapshot Report) registered third-quarter 2013 earnings of 52 cents per limited-partner unit, beating the Zacks Consensus Estimate of 26 cents with ease. The quarterly earnings also improved from the year-ago level of 38 cents.

Quarterly total revenue decreased 7.6% year over year to $1,586.0 million but surpassed the Zacks Consensus Estimate of $1,460.0 million.

Notably, Williams Partners' distributable cash flow (DCF) attributable to partnership operations in the reported quarter was $378 million against $316 million in the year-ago quarter. Recently, the partnership increased its quarterly cash distribution by 8.7% year over year to 87.75 cents per unit.

Segment Performance

Consolidated adjusted segment profit was $388.0 million, down 12.6% from the year-ago level of $444.0 million.

Northeast G&P: The segment reported loss of $1 million compared with loss of $4 million in third-quarter 2012. The improvement can be attributed to an increase in fee revenues in the Susquehanna Supply Hub and Ohio Valley Midstream businesses as well as higher Laurel Mountain Midstream equity earnings.

Atlantic-Gulf: The segment reported profits of $137 million compared with $124 million in third-quarter 2012. The upside was primarily backed by higher transportation fee revenues and lower project development costs.

West: Segmental profit was $207 million compared with $223 million a year ago. Lower natural gas liquids (NGL) margins, including the effects of system-wide ethane rejection and higher natural gas prices, were responsible for the decline.

NGL & Petchem Services: The segment reported profits of $62 million compared with $86 million in third-quarter 2012. The downside came from lower olefin product margins, primarily due to the Geismar plant downtime.


Williams Partners lowered its outlook for earnings and distributable cash flow in 2013 and 2014 apprehending lower NGL processing margins.

The partnership expects DCF of $1,720 million for 2013 and $2,350 million for 2014.

Total adjusted segment profits are expected at $1,730 million for 2013 and $2,345 million for 2014.

Capital expenditures are estimated at $3,605 million for 2013 and $3,120 million for 2014.

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 - Analyst Report).

Williams Partners retains a Zacks Rank #3 (Hold). However, there are other stocks in the oil and gas sector – TransAtlantic Petroleum Ltd (TAT - Snapshot Report) and Northern Oil and Gas, Inc. (NOG - Snapshot Report) – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.

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