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Williams Companies (WMB) Q4 Earnings in Line, Sales Top


The Williams Companies, Inc. WMB reported adjusted earnings from continuing operations of 20 cents per share in line with the Zacks Consensus Estimate. The bottom line improved from the prior-year figure of 17 cents per share. Better year-over-year results can be attributed to absence of impairment charges associated with equity method investments and favorable changes in the income tax provision.

For the quarter ended Dec 31, 2017, Williams Companies reported revenues of $2,228 million, surpassing the Zacks Consensus Estimate of $2,157 million. Further, revenues increased from the year-ago quarter figure of $2,198 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 L.P. (WPZ): This segment reported adjusted operating profit of $1,150 million, up 3.3% from $1,113 million in the year-ago quarter. Increased fee-based revenues driven by the partnership’s Atlantic Gulf and West business drove results.

Other: The segment posted adjusted operating profit of $10 million, flat with the year-ago figure.

Expenses Summary

The total cost and expenses increased 49% to $2,415 million in the reported quarter compared with $1,617 million in the prior-year quarter. Increased costs were primarily driven by higher product costs and regulatory charges resulting from tax reforms.

Capital Expenditure & Balance Sheet

During the reported quarter, Williams Companies’ capital expenditure was $699 million. As of Dec 31, 2017, the company had cash and cash equivalents of 899 million compared with $170 million in the year ago quarter. Long-term debt of the company was $20,434 million, representing a debt-to-capitalization ratio of 67.9%.

2018 Outlook

The company issued a preliminary guidance for 2018, wherein it anticipates the net income from its major segment Williams Partners to be within the range of $1.5-$1.7 billion range. Williams Companies expects the annual dividend growth rate of 10-15% for 2018 and 2019, with the dividend-coverage ratio of 1.35x.

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 has a Zacks Rank #4 (Sell).

Some better-ranked players in the energy space are NuStar GP Holdings, LLC NSH and TOTAL S.A. TOT. Both these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NuStar GP Holdings is expected to witness a year-over-year increase of 27.82% in revenues in 2018.

TOTAL delivered average positive earnings surprise of 3.53% in the trailing four quarters.

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