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NEW YORK (TheStreet) -- Williams Partners (WPZ) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+ . TheStreet Ratings Team has this to say about their recommendation:
"We rate WILLIAMS PARTNERS LP (WPZ) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 37.12% is the gross profit margin for WILLIAMS PARTNERS LP which we consider to be strong. Regardless of WPZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WPZ's net profit margin of 12.70% compares favorably to the industry average.
- Net operating cash flow has decreased to $321.00 million or 33.40% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- WILLIAMS PARTNERS LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, WILLIAMS PARTNERS LP reported lower earnings of $1.45 versus $1.94 in the prior year. For the next year, the market is expecting a contraction of 34.5% in earnings ($0.95 versus $1.45).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has decreased by 23.6% when compared to the same quarter one year ago, dropping from $284.00 million to $217.00 million.
- You can view the full analysis from the report here: WPZ Ratings Report
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