Back to top

Analyst Blog

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. (RRC - Analyst Report), 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).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
PANTRY INC PTRY 21.02 +2.09%
INTEL CORP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%