Shares of energy infrastructure provider, Williams Partners L.P. WPZ touched a 52-week low of $27.57 per share on Nov 27 to finally close a tad higher at $27.79. Volume was also downsized with about 0.9 million shares changing hands.
What Led to the Share Price Decline?
This drop in price continued the recent downtrend for Williams Partners amid volatility in the energy segment and its existing commodity price exposure. The partnership lost about 17.9% over the past one month and is down nearly 45.6% year to date.
From a peak of about $13.50 per million barrels per unit in 2008 to around $2.2 now – sinking in between to the 10-year low of under $2 in 2012 – the plummeting value of natural gas represents a decline of around 80% over seven years.
In the absence of major production cuts, we do not expect much upside in gas prices in the near term. Things were made worse by apprehensions of soft heating demand with forecasts of higher temperatures across certain regions of the U.S. in the short term.
Finally, the company incurred a loss of 32 cents per limited-partner unit in the recently reported third quarter. While the Zacks Consensus Estimate was earnings of 28 cents, the partnership’s year-earlier profit was 7 cents. Quarterly total revenue of $1,792 million was also down 10.8% year over year from $2,008 million. Moreover, the top line came in below the Zacks Consensus Estimate of $2,023 million.
Currently, Williams Partners carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Stocks That Warrant a Look
Some better-ranked players in the energy sector are Energy Transfer Equity, L.P. ETE, Murphy USA Inc. MUSA and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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