Williams Partners L.P. (WPZ) posted second-quarter 2014 earnings of 11 cents per limited-partner unit, which lagged the Zacks Consensus Estimate of 44 cents. Earnings also declined from the year-ago profit level of 31 cents.
Quarterly total revenue decreased 8.3% year over year to $1,616.0 million and was also below the Zacks Consensus Estimate of $1,853.0 million.
Notably, Williams Partners' distributable cash flow (DCF) attributable to partnership operations in the reported quarter was $504 million, against $387 million in the year-ago quarter. Recently, the partnership increased its quarterly cash distribution by 6.3% year over year to 91.65 cents per unit.
Segment Performance
Consolidated adjusted segment profit was $512.0 million, up 19.6% from the year-ago level of $428.0 million.
Northeast G&P: The segment reported profits of $15 million, compared with $12 million in second-quarter 2013. The improved results were primarily driven by higher volumes and improved Laurel Mountain Midstream equity earnings.
Atlantic-Gulf: The segment reported profits of $168 million versus $152 million in second-quarter 2013. The upside was primarily backed by higher transportation fee revenues related to expansion projects.
West: Segmental profit was $152 million compared with $162 million a year ago. Lower NGL margins, primarily owing to the expiration of a natural gas processing contract in Sep 2013, led to the decline.
NGL & Petchem Services: The segment reported profits of $58 million, compared with $101 million in second-quarter 2013. The downside was mainly due to closure of Geismar plant for the quarter.
Guidance
Williams Partners reaffirmed its guidance for distribution per limited partner unit growth of 6% in both 2014 and 2015, while expecting 4.5% in 2016.
The partnership expects DCF of $1,950 million for 2014, $2,785 million for 2015 and $3,085 million for 2016.
Adjusted segment profits are anticipated to be $2,010 million for 2014, $2,830 million for 2015 and $3,225 million for 2016.
Capital expenditures are estimated at $3,730 million for 2014, $2,450 million for 2015 and $2,280 million for 2016.
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).
At present, Williams Partners carries a Zacks Rank #3 (Hold). However, better-ranked stocks in the oil and gas sector like Weatherford International plc (WFT) and CNOOC Ltd (CEO), both of which sport a Zacks Rank #1 (Strong Buy) are worth consideration.
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