We expect North American energy firm Williams Companies
Inc. ( WMB
) to beat expectations when it reports first-quarter 2013 results
after the closing bell on Tuesday, May 7.
Why a Likely Positive Surprise?
Our proven model shows that Williams is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP: Expected Surprise
Prediction or ESP (Read: Zacks Earnings ESP: A Better Method ), which
represents the difference between the Most Accurate estimate of 25
cents and the Zacks Consensus Estimate of 24 cents, stands at
+4.17%. This is a meaningful and leading indicator of a likely
positive earnings surprise for shares.
Zacks Rank #3 (Hold): The stocks with Zacks
Rank #1 (Strong buy), #2 (Buy) and #3 (Hold) have a significantly
higher chance of beating earnings. The Sell-rated stocks (#4 and
#5) should never be considered while going into an earnings
The combination of Williams' Zacks Rank #3 (Hold) and +4.17% ESP
makes us very confident in looking for a positive earnings beat on
What is Driving the Better-than-Expected
Williams' midstream assets, which are less sensitive to
commodity prices, help the company to maintain a steady stream of
revenue and cash flow even if natural gas prices stay low.
Furthermore, Williams is poised to benefit from the rebound in
industrial activity, which will include increased natural gas
demand in the form of natural gas liquids.
In particular, the growth prospects for energy infrastructure
all across North America remain exciting with the requirement to
support producers in the growth of shale plays, especially in
regions where there is a severe lack of facilities. This creates
exciting opportunities for a pipeline firm like Williams, as it
looks to capture the economic benefit of this trend.
Other Stocks to Consider
Here are some other companies that may be considered as our
model shows they have the right ingredients to post an earnings
beat this quarter:
SemGroup Corp. ( SEMG ), Earnings ESP
of +22.50% and a Zacks Rank #1 (Strong Buy).
Atlas Resource Partners L.P . ( ARP ), Earnings ESP of
+8.70% and Zacks Rank #2 (Buy).
Delek US Holdings, Inc. ( DK ), Earnings ESP of
+0.86% and a Zacks Rank #3 (Hold).ATLAS RES PTNRS (ARP): Free Stock Analysis
ReportDELEK US HLDGS (DK): Free Stock Analysis ReportSEMGROUP CORP-A (SEMG): Free Stock Analysis
ReportWILLIAMS COS (WMB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment