North American energy firm Williams Companies Inc.WMB reported impressive fourth-quarter 2016 earnings on the back of significant cost reductions and continued improvement in financial performance.
The company reported adjusted earnings from continuing operations of 17 cents per share that surpassed the Zacks Consensus Estimate of 16 cents. Also, the bottom line improved from the prior-year figure of 1 cent per share.
For the quarter ended Dec 31, 2016, Williams Companies reported revenues of $2,198 million. The top line handily beat the Zacks Consensus Estimate of $1,889 million and also improved from the year-ago quarter level of $2,006 million.
Williams Partners: This segment reported adjusted operating profit of $1,113 million, up 4.6% from $1,064 million in the year-ago quarter. The upside was primarily driven by a reduction in operating and maintenance costs as well as selling, general and administrative expenses.
Williams NGL & Petchem Services: The unit incurred adjusted operating loss of $4 million, narrower than the year-ago quarter loss of $6 million.
Other: The segment posted adjusted operating profit of $14 million compared with the year-ago quarter profit of $8 million.
Operating and Maintenance Expenses
Williams Companies, Inc. (The) Price and EPS Surprise
Operating and maintenance expenses came in at $401 million as against $428 million in the fourth quarter of 2015.
Capital Expenditure & Balance Sheet
During the reported quarter, Williams Companies' capital expenditure was $474 million. As of Dec 31, 2016, the company had long-term debt of $22,624 million, which represents a debt-to-capitalization ratio of 83.1%. Williams Companies has a cash balance of about $170 million.
Zacks Rank & Key Picks from the Sector
Williams Companies currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. BAK , McDermott International, Inc. MDR and Suncor Energy Inc. SU . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
In the last quarter, McDermott posted a positive earnings surprise of 250.00%.
In the last quarter, Suncor posted a positive earnings surprise of 300.00%.
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