Williams Partners Misses on Earnings and Revs - Analyst Blog

Williams Partners L.P. WPZ registered first-quarter 2014 earnings of 36 cents per limited-partner unit, missing the Zacks Consensus Estimate of 47 cents. Earnings also deteriorated from the year-ago profit level of 50 cents.

Quarterly total revenue decreased 6.3% year over year to $1,693.0 million and also came in below the Zacks Consensus Estimate of $1,800.0 million.

Notably, Williams Partners' distributable cash flow (DCF) attributable to partnership operations in the reported quarter was $582 million against $497 million in the year-ago quarter. Recently, the partnership increased its quarterly cash distribution by 6.7% year over year to 90.45 cents per unit.
    
Segment Performance

Consolidated adjusted segment profit was $563.0 million, up 15.4% from the year-ago level of $488.0 million.

Northeast G&P: The segment reported profits of $6 million compared with loss of $9 million in first-quarter 2013. The improved results are primarily due higher volumes and improved Laurel Mountain Midstream equity earnings.

Atlantic-Gulf: The segment reported profits of $165 million compared with $159 million in first-quarter 2013. The upside was primarily backed by higher transportation fee revenues partially offset by lower NGL margins.

West: Segmental profit was $165 million compared with $186 million a year ago. Lower NGL margins, primarily driven by the expiration of a natural gas processing contract in Sep 2013, were responsible for the decline.

NGL & Petchem Services: The segment reported profits of $167 million compared with $158 million in first-quarter 2013. The upside came from insurance recoveries.

Guidance

Williams Partners reaffirmed its guidance for distribution per limited partner unit growth of 6% in both 2014 and 2015.

The partnership expects DCF of $2,350 million for 2014 and $2,785 million for 2015.

Adjusted segment profits are expected at $2,345 million for 2014 and $2,830 million for 2015.

Capital expenditures are estimated at $3,590 million for 2014 and $2,450 million for 2015.

In Conclusion

Williams Partners is an energy master limited partnership engaged in gathering, transportation, treating and processing of natural gas as well as fractionation and storage of NGLs. The general partner of the partnership is owned and managed by Williams Companies Inc. WMB.

Williams Partners carries a Zacks Rank #3 (Hold). However, there are better-ranked stocks in the oil and gas sector such as Helmerich & Payne, Inc. HP, and Matrix Service Company MTRX, each holding a Zacks Rank #1 (Strong Buy).