Williams Partners L.P.’s WPZ third-quarter 2017 earnings of 27 cents per limited-partner unit lagged the Zacks Consensus Estimate of 39 cents. It also declined from the year-ago quarter’s earnings of 42 cents. Higher pipeline maintenance cost led to the miss.
Total revenues decreased 1.2% year over year in the quarter to $1,885 million from $1,907 million. However, revenues increased from the Zacks Consensus Estimate of $1,867 million. The improvement was mainly driven by higher fee-based revenues and contributions from two Marcellus shale gathering systems.
Williams Partners' distributable cash flow (DCF), associated with partnership operations in the reported quarter, was $669 million compared with $795 million in the year-ago quarter. Recently, the partnership announced a regular quarterly cash distribution of 60 cents per unit.
Williams Partners LP Price, Consensus and EPS Surprise
Williams Partners LP Price, Consensus and EPS Surprise | Williams Partners LP Quote
Segment Performance
Consolidated adjusted segment profit was $1,101 million, down 7.4% from the year-ago level of $1,189 million.
Northeast G&P: The segment reported profits of $246 million compared with $220 million in third-quarter 2016. Contributions from two Marcellus shale gathering systems, where the partnership has increased its stake, led to the improvement. Fee-based revenues also contributed significantly.
Atlantic-Gulf: The segment reported profits of $431 million, compared with $434 million in the year-ago quarter and Zacks Consensus Estimate of $471 million. The rise in maintenance costs of pipeline systems led to the fall. However, it was partially offset by higher fee-based revenues on increased volumes from Transco expansion developments.
West: Segmental profit was $426 million compared with $433 million a year ago. The decline can be attributed to impairment costs related to gathering operations in the Mid-Continent region and due to sale of its interests in certain non-operated Delaware Basin assets in first-quarter 2017.
Following the sale of Williams Partners’ ownership interest in the Geismar olefins plant on Jul 6, the partnership’s NGL & Petchem Services segment lost operating assets.
Q3 Price Performance
The pricing chart reveals that the company’s shares have underperformed the industry in the last three months. During this period, the company’s shares have declined 3% compared with the industry’s deterioration of 1.2%.
Zacks Rank
Williams Partners currently has a Zacks Rank #3 (Hold). A few other top-ranked players in the energy sector include Braskem SA BAK, ConocoPhillips COP and Noble Midstream Partners LP NBLX. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The largest petrochemical operator in Latin America, Braskem, delivered positive earnings surprise of 68.54% in the preceding quarter.
ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It delivered an average positive earnings surprise of 152.34% in the last four quarters.
Noble Midstream Partners, headquartered in Houston, TX, has diversified energy infrastructure properties. The company delivered positive earnings surprise of 30.67% in the preceding quarter.
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