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Zacks Investment Research downgraded leading master limited partnership Williams Partners L.P. (WPZ - Snapshot Report) 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 - Snapshot Report) 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. , Enerplus Corporation (ERF - Snapshot Report) and NGL Energy Partners LP (NGL - Snapshot Report) are worth considering. All three carry a Zacks Rank #1 (Strong Buy).

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