North American energy firm Williams Companies Inc. ( WMB - Analyst Report ) reported weak fourth-quarter 2012 results, hamstrung by lower natural gas liquid (NGL) margins along with higher development cost related to earlier acquisition.

Earnings per share – excluding special items – came in at 25 cents, below the Zacks Consensus Estimate of 26 cents and also down from the year-ago period adjusted profit of 36 cents. Revenues of $1,900.0 million were down 9.6% from the fourth quarter of 2011 and were also short of our projection of $2,105.0 million.

Segmental Analysis

Williams Partners: This segment reported adjusted operating profit of $449.0 million in the quarter, down from the year-ago level of $542.0 million. Segment performance was hurt by deteriorating NGL prices, coupled with rising expenses.

Williams NGL & Petchem Services: The unit registered a quarterly adjusted operating profit of $27.0 million, smaller than the $35.0 million recorded in the fourth quarter of 2011. Decline in Canadian NGL and propylene product margins, partially offset by increased propylene sales volumes, lowered the quarter results.

Other: The segment incurred adjusted loss of $12.0 million, against the prior-year quarter profit of $1.0 million.

Capital Expenditure & Balance Sheet

During the quarter, Williams’ capital expenditure was $877.0 million, bringing the full-year spending to $2,529.0 million.

As of Dec 31, 2012, the company had long-term debt of $10,735.0 million, representing debt-to-capitalization ratio of 69.3%. Williams has a current cash balance of about $839.0 million.

Guidance

For 2013, Williams guided toward earnings per share in the range of 75 cents–$1.15 (indicating a mid-point of 95 cents). The same for 2014 is projected to be between $1.20 and $1.70 (midpoint is $1.45). The influence of lower expected commodity margins will likely put pressure on the company’s earnings in the next two years.

Williams expects to generate total adjusted operating profit of $1,700–$2,250 million in 2013 and $2,475–$3,175 million in 2014.

Capital and investment expenses are projected to be in the range of $3,975–$4,575 million in 2013, while for 2014 it is expected to be between $2,400 million and $3,100 million.

Williams also reaffirmed its pledge to hike dividend payout by 20% annually through 2014.

Stocks to Consider

Williams currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at other energy production/pipeline entities like Atlas Energy L.P. ( ATLS - Snapshot Report ) , Crestwood Midstream Partners L.P. ( CMLP - Snapshot Report ) and SemGroup Corp. ( SEMG - Snapshot Report ) as attractive investments. All these firms – sporting a Zacks Rank #1 (Strong Buy) – offer value and are worth accumulating at current levels.