It has been about a month since the last earnings report for Williams Partners L.P. . Shares have lost about 12.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is WPZ due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2017 Results
Williams Partners reported fourth-quarter 2017 adjusted earnings of 39 cents, below the Zacks Consensus Estimate of 44 cents owing to higher operating and maintenance costs.
The bottom line, however, increased from 24 cents in the year-ago quarter. The improvement was mainly driven by increase in fee-based revenues from higher volumes from the Haynesville shale play.
Total revenues increased 1.5% year over year in the quarter to $2,223 million from $2,190 million. The top line also surpassed the Zacks Consensus Estimate of $2,130 million.
Williams Partners' distributable cash flow (DCF) for the reported quarter was recorded at $702 million, up from $699 million in the year-ago quarter. The partnership’s cash distributions for the October to December quarter stands at 60 cents per unit.
Segment Performance
Consolidated adjusted segment profit was $1,150 million, up 3.3% from the year-ago level of $1,113 million.
Northeast G&P: The business unit generated adjusted earnings of $238 million, increased almost 9% from $219 million profit for the October to December quarter of 2016. During January to March quarter of 2017, the partnership boosted its ownership in two gathering systems in the Marcellus shale, contributed to the higher profit for fourth quarter.
Atlantic-Gulf: The partnership reported adjusted profit of $433 million from the unit, down 4.6% from $454 million in the year ago comparable period. Transco pipeline system’s higher operating and maintenance expenditure led to the underperformance.
West: Segmental profit was $481 million, up by 22% from $394 million a year ago. Increase in fee-based revenues associated with surge in volumes from the Haynesville shale play aided the outperformance.
NGL & Petchem Services: From this business unit, Williams Partners reported adjusted loss of $1 million against a profit of $46 million in the prior year quarter.
Operating & Maintenance Expense
The partnership reported fourth quarter operating and maintenance expense of $421 million, up almost 7% from the year-ago period.
Guidance
For 2018, the partnership expects growth capital spending at $2.7 billion. The 2018 capital expenditure for the Transco growth project has been estimated by Williams Partners at $1.7 billion.
The partnership projected distributable cash flow for 2018 to lie between $2.9 to $3.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
VGM Scores
At this time, WPZ has an average Growth Score of C, a grade with the same score on the momentum front. Thestock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value, growth, and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions looks promising. Interestingly, WPZ has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Image: Bigstock
Why Is Williams Partners (WPZ) Down 12.2% Since Its Last Earnings Report?
It has been about a month since the last earnings report for Williams Partners L.P. . Shares have lost about 12.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is WPZ due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fourth-Quarter 2017 Results
Williams Partners reported fourth-quarter 2017 adjusted earnings of 39 cents, below the Zacks Consensus Estimate of 44 cents owing to higher operating and maintenance costs.
The bottom line, however, increased from 24 cents in the year-ago quarter. The improvement was mainly driven by increase in fee-based revenues from higher volumes from the Haynesville shale play.
Total revenues increased 1.5% year over year in the quarter to $2,223 million from $2,190 million. The top line also surpassed the Zacks Consensus Estimate of $2,130 million.
Williams Partners' distributable cash flow (DCF) for the reported quarter was recorded at $702 million, up from $699 million in the year-ago quarter. The partnership’s cash distributions for the October to December quarter stands at 60 cents per unit.
Segment Performance
Consolidated adjusted segment profit was $1,150 million, up 3.3% from the year-ago level of $1,113 million.
Northeast G&P: The business unit generated adjusted earnings of $238 million, increased almost 9% from $219 million profit for the October to December quarter of 2016. During January to March quarter of 2017, the partnership boosted its ownership in two gathering systems in the Marcellus shale, contributed to the higher profit for fourth quarter.
Atlantic-Gulf: The partnership reported adjusted profit of $433 million from the unit, down 4.6% from $454 million in the year ago comparable period. Transco pipeline system’s higher operating and maintenance expenditure led to the underperformance.
West: Segmental profit was $481 million, up by 22% from $394 million a year ago. Increase in fee-based revenues associated with surge in volumes from the Haynesville shale play aided the outperformance.
NGL & Petchem Services: From this business unit, Williams Partners reported adjusted loss of $1 million against a profit of $46 million in the prior year quarter.
Operating & Maintenance Expense
The partnership reported fourth quarter operating and maintenance expense of $421 million, up almost 7% from the year-ago period.
Guidance
For 2018, the partnership expects growth capital spending at $2.7 billion. The 2018 capital expenditure for the Transco growth project has been estimated by Williams Partners at $1.7 billion.
The partnership projected distributable cash flow for 2018 to lie between $2.9 to $3.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
Williams Partners LP Price and Consensus
Williams Partners LP Price and Consensus | Williams Partners LP Quote
VGM Scores
At this time, WPZ has an average Growth Score of C, a grade with the same score on the momentum front. Thestock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value, growth, and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions looks promising. Interestingly, WPZ has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.