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Williams Companies (WMB) Q3 Earnings Lag, Sales Fall Y/Y

North American energy firm The Williams Companies, Inc.WMB reported adjusted earnings from continuing operations of 15 cents per share missing the Zacks Consensus Estimate of 19 cents. Higher impairment charges incurred during the quarter along with unfavorable changes in the income tax provision led to the weaker-than-expected results.

Further, the bottom line also deteriorated from the prior-year figure of 20 cents per share. This was mainly due to the absence of gains associated with the Geismar olefins facility which was divested on Jul 6. Higher costs and lower adjusted profit from William Partners L.P. WPZ also led to lower year-over-year earnings.

For the quarter ended Sep 30, 2017, Williams Companies reported revenues of $1,891 million, above the Zacks Consensus Estimate of $1,825 million. However, revenues decreased from the year-ago quarter figure of $1,905 million.

Williams Companies, Inc. (The) Price, Consensus and EPS Surprise

Williams Companies, Inc. (The) Price, Consensus and EPS Surprise | Williams Companies, Inc. (The) Quote

Segmental Analysis

Williams Partners: This segment reported adjusted operating profit of $1,101 million, down 7.4% from $1,189 million in the year-ago quarter. Unfavorable impacts from the disruptive hurricanes along with the absence of results from the Geismar facility and higher costs led to weaker results.

Other: The segment posted adjusted operating profit of $12 million compared with the year-ago profit of $3 million. Results were mainly driven by the absence of unfavorable results from certain former Canadian operations which were offloaded in September 2016.

Expenses Summary

The total cost and expenses increased 3.5% to $1,614 million in the reported quarter compared with $1,560 million in the prior-year quarter. Increased costs were primarily driven by higher impairment charges of $1,210 million incurred in the reported quarter as against $1 million in the third quarter of 2016. However, this was mainly offset by $1,095 million gain on sale of Geismar facility.

Further, operating and maintenance costs (O&M) and product costs also rose in the quarter under review.

Capital Expenditure & Balance Sheet

During the reported quarter, Williams Companies' capital expenditure was $644 million. As of Sep 30, 2017, the company had cash and cash equivalents of 1,172 million, as against $77 million in the year ago quarter. Long-term debt of the company was $20,567 million, representing a debt-to-capitalization ratio of 71.7%.

Zacks Rank & Key Picks

Based in Tulsa, Williams Companies is a premier energy infrastructure provider in North America. The company's core operations include finding, producing, gathering, processing, and transportation of natural gas. Boasting a widespread pipeline system, Williams Companies is one of the largest domestic transporters of natural gas by volume. The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are ConocoPhillips COP and Hess Corporation HES . While ConocoPhillips sports a Zacks Rank #1 (Strong Buy), Hess carries a Zacks Rank #2(Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

ConocoPhillips delivered positive average earnings surprise of 152.34% in the preceding four quarters.

Hess delivered positive average earnings surprise of 3.91% in the preceding four quarters.

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Williams Partners LP (WPZ): Free Stock Analysis Report

Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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