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Williams Partners (WPZ) Q4 Earnings Miss Estimates, Grow Y/Y

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Energy pipeline company Williams Partners LP (WPZ - Free Report) reported weaker-than-expected fourth-quarter 2016 earnings, primarily owing to lower volumes and decreased rates from Barnett and Anadarko areas. This underperformance was partially offset by higher fee-based revenues, increased NGL margin and lower expenses.  

The partnership announced earnings of 24 cents per limited partner unit, which missed the Zacks Consensus Estimate of 34 cents. However, the bottom line improved from the year-ago profit level of 20 cents per limited partner unit.

 

 

Quarterly total revenue increased almost 10% year over year to $2,190 million from $1,998 million. The top line also surpassed the Zacks Consensus Estimate of $1,889 million.

Williams Partners' distributable cash flow (DCF) attributable to partnership operations in the reported quarter was $699 million as against $718 million in the year-ago quarter. Total cash distributed during the quarter was $762 million compared with $725 million in the year-ago quarter.

Segment Performance

Consolidated adjusted segment profit was $1,113 million, up 4.6% from the year-ago level of $1,064 million.

Central: This includes operations that were part of the former Access Midstream segment. The segment reported profits of $194 million compared with $219 million in the prior-year quarter. Lower volumes as well as decreased rates from Barnett and Anadarko regions led to the underperformance.

Northeast G&P: The segment recorded profits of $212 million as against $209 million in fourth-quarter 2015. The improved results were primarily driven by lower expenses as well as higher fee-based revenues.

Atlantic-Gulf: The segment reported profits of $449 million compared with $390 million in the year-ago quarter. The upside may be attributed to higher fee-based revenues from both offshore and Transco expansion developments as well as improved NGL margins.

West: Segmental profit was $171 million as against $175 million a year ago.

NGL & Petchem Services: The segment reported profits of $87 million compared with $72 million in the year-earlier quarter.

Guidance

The partnership reaffirmed total growth capital spending for 2017 at $2.1–$2.8 billion. For 2017, the partnership’s distributable cash flow is likely to be $2.8 billion. Moreover, Williams Partners is expected to generate operating earnings of $4.6 billion in the year.

Share Price Movement

In the last three months the partnership’s units outperformed the Zacks categorized Energy & Pipeline Mlp industry. During the aforesaid period, Williams Partners units increased almost 11% compared with 9.9% gain by the industry.

Zacks Rank

Williams Partners currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector include Ultra Petroleum Corp. , Abraxas Petroleum Corporation (AXAS - Free Report) and W&T Offshore Inc. (WTI - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ultra Petroleum is expected to report revenue growth of 57.7% in 2017.

In 2017, Abraxas Petroleum is likely to report year-over-year growth of almost 88% and 250% in revenues and earnings, respectively.

W&T Offshore reported a positive earnings surprise in each of the last four quarters with an average beat of 31.49%.

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