It has been about a month since the last earnings report for WilliamsWMB . Shares have lost about 2.4% in the past month, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
First Quarter 2017 Results
Williams reported adjusted earnings from continuing operations of $0.14 per share missing the Zacks Consensus Estimate of $0.20 on increased costs.
However, the bottom line improved from the prior-year figure of $0.03 per share. The improved results were driven by higher revenues, absence of impairment costs and growth in operating income from both its segments.
For the quarter ended Mar 31, 2017, Williams reported revenues of $1,988 million, surpassing the Zacks Consensus Estimate of $1,978 million and also improving from the year-ago quarter level of $1,660 million.
In Sep 2016, Williams announced major changes for a simplified, leaner business model and implemented the changes effective Jan 1. As a result of the realignment and the sale of Canadian operations, Williams NGL & Petchem Services reporting segment has been eliminated.
Williams Partners: This segment reported adjusted operating profit of $1,117million, up 5.3% from $1,060 million in the year-ago quarter. The upside was primarily driven by increased revenues, higher commodity prices, lower operating and selling costs. Increased contributions from expansion projects in Gulf of Mexico and Transco contributed to the results.
Other: The segment posted adjusted operating profit of $28 million compared with the year-ago quarter loss of $4 million. Results were driven by higher income associated with a regulatory asset primarily driven by our increased ownership in William Partners LP.
The total cost and expenses increased 11.2% to $1,555 in the reported quarter as against $1,398 in the prior-year quarter. The increase was mainly driven by higher product costs which escalated 82% compared to the prior-year quarter.
However, reduction in the operating and maintenance costs (O&M) and Selling, General and Administrative Expenses (S, G&A) partially offset the increase in the total costs. The O&M expenses in the reported quarter were $368 million as against $391 million in the year-ago quarter. The S, G&A expenses decreased to $161 million from the prior-year figure of $221 million.
Capital Expenditure & Balance Sheet
During the reported quarter, Williams' capital expenditure was $511 million. As of Mar 31, 2017, the company had cash and cash equivalents of 639 million. The long-term debt of the company was $21,825 million, representing a debt-to-capitalization ratio of 72.1%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter compared to one higher. In the past month, the consensus estimate has shifted by 13.9%.
Williams Price and Consensus
At this time, Williams' stock has a great Growth Score of 'A', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for growth and momentum investors.
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.