North American energy firm,
Williams Companies Inc.
) is set to report first-quarter 2014 results after the closing
bell on Apr 30. Let's see how things are shaping up prior to this
Factors to Consider this Quarter
Williams Companies is a premier energy infrastructure provider in
North America. In the last reported quarter, it managed to beat
the Zacks Consensus Estimate by just a penny. However, earnings
declined 12% year over year due to reduced natural gas liquid
(NGL) margins, plant shut down activities and increased operating
and maintenance expenses. Revenues were also affected as a result
of lower product sales in the Williams Partners business unit.
Though commodity prices remained strong during the past few
months thanks to the frigid winter, other factors that impacted
the fourth quarter results, if continued, could hamper the
The company's fundamentals do not look too good as well.
Williams Companies has a high debt-to-capitalization ratio of
70.4% (As of Dec 31, 2013). Moreover, its price to earnings ratio
as well as price to sales ratio is substantially higher than its
peer group average. These factors make the company more
vulnerable than its peers.
Accordingly, our proven model does not conclusively show that
Williams Companies is likely to beat earnings this quarter. That
is because a stock needs to have both a positive Earnings ESP
(Expected Surprise Prediction) and a Zacks Rank #1, 2 or 3 for
this to happen. This is not the case here.
Negative Zacks ESP:
This is because the Most Accurate estimate stands at 26 cents per
share while the Zacks Consensus Estimate is 27 cents, resulting
in a -3.70% ESP.
Zacks Rank #3 (Hold):
Williams Companies' Zacks Rank #3 when combined with a negative
ESP lowers the predictive power and makes surprise prediction
We caution against stocks with Zacks #4 and 5 Ranks (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows these have the right combination of elements to post
an earnings beat this quarter:
Callon Petroleum Company
), earnings ESP of +25.00% and Zacks Rank #2 (Buy). The company
is slated to release first quarter earnings on May 8.
Canadian Natural Resources Limited
), earnings ESP of +8.22% and Zacks Rank #2. The company is
expected to release earnings after the closing bell on May 8.
Abraxas Petroleum Corp.
), earnings ESP of +20.00% and Zacks Rank #2. The company is
scheduled to release earnings on May 8.
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
CDN NTRL RSRCS (CNQ): Free Stock Analysis
CALLON PETE-DEL (CPE): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
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