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What's in Store for Williams Companies (WMB) in Q2 Earnings?
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The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter 2018 results on Aug 1 after the closing bell. The Zacks Consensus Estimate for second-quarter earnings is pegged at 16 cents on revenues of $2,000 million.
In the last reported quarter, the Tulsa, OK-based company delivered a negative earnings surprise of 9.52%. The company’s earnings surprise history also displays a dismal record. Williams Companies lagged estimates in three of the trailing four quarters, with an average of 15.54%.
Notably, the Zacks Consensus Estimate of 16 cents for the second quarter has been revised downward by 2 cents over the past 30 days. However, the current estimate compares favorably with a profit of 13 cents per share in the second quarter of 2017. The Zacks Consensus Estimate for revenues also reflects a year-over-year improvement of 3.9%.
Williams Companies, Inc. (The) Price and EPS Surprise
Let’s delve deeper to see how things are shaping up for this announcement.
Factors at Play
Williams Companies’ extensive natural gas exposure raises its sensitivity to the commodity’s price. Natural gas prices in the first quarter were $2.92 MMBtu compared with $3.03/MMBtu in the year-ago quarter, reflecting a decline of around 3.7%. Weakness in the natural gas prices is likely to have an adverse effect on the company. The company is also likely to be affected by lower throughput volumes due to its divestment of Geismar Plant and Canadian assets. Further, the company is also bearing the brunt of increased expenses since the past three quarters and the trend is likely to continue in the to-be-reported quarter as well, putting further pressure on its earnings and financials. As it is, the company carries a leverage of around 70%, which restricts its financial freedom.
However, Williams Companies’ midstream subsidiary William Partners, L.P. , which is less sensitive to commodity prices, is likely to help the company maintain a steady stream of revenues. We believe that the company could benefit from increasing volumes and processing margins from the Transco pipeline-expansion projects that came into service in 2017.
Earnings Whispers
Our proven model does not show that Williams Companies is likely to beat estimates in the to-be-reported quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. That is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +9.68%. This is because the Most Accurate Estimate stands at 17 cents while the Zacks Consensus Estimate is pegged at 16 cents.
Zacks Rank: Currently, Williams Companies carries a Zacks Rank #4 (Sell). While a positive ESP bodes well for the company, a Zacks Rank #4 reduces the chances of an earnings beat. Notably, we caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Estimates
While earnings beat looks uncertain for Williams Companies, one can consider firms from the energy space that have the right combination of elements to beat estimates in the quarter to be reported:
Jones Energy, Inc. (JONE - Free Report) has an Earnings ESP of +13.97% and a Zacks Rank #3. The firm is expected to release second-quarter results on Aug 2.
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What's in Store for Williams Companies (WMB) in Q2 Earnings?
The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter 2018 results on Aug 1 after the closing bell. The Zacks Consensus Estimate for second-quarter earnings is pegged at 16 cents on revenues of $2,000 million.
In the last reported quarter, the Tulsa, OK-based company delivered a negative earnings surprise of 9.52%. The company’s earnings surprise history also displays a dismal record. Williams Companies lagged estimates in three of the trailing four quarters, with an average of 15.54%.
Notably, the Zacks Consensus Estimate of 16 cents for the second quarter has been revised downward by 2 cents over the past 30 days. However, the current estimate compares favorably with a profit of 13 cents per share in the second quarter of 2017. The Zacks Consensus Estimate for revenues also reflects a year-over-year improvement of 3.9%.
Williams Companies, Inc. (The) Price and EPS Surprise
Williams Companies, Inc. (The) Price and EPS Surprise | Williams Companies, Inc. (The) Quote
Let’s delve deeper to see how things are shaping up for this announcement.
Factors at Play
Williams Companies’ extensive natural gas exposure raises its sensitivity to the commodity’s price. Natural gas prices in the first quarter were $2.92 MMBtu compared with $3.03/MMBtu in the year-ago quarter, reflecting a decline of around 3.7%. Weakness in the natural gas prices is likely to have an adverse effect on the company. The company is also likely to be affected by lower throughput volumes due to its divestment of Geismar Plant and Canadian assets. Further, the company is also bearing the brunt of increased expenses since the past three quarters and the trend is likely to continue in the to-be-reported quarter as well, putting further pressure on its earnings and financials. As it is, the company carries a leverage of around 70%, which restricts its financial freedom.
However, Williams Companies’ midstream subsidiary William Partners, L.P. , which is less sensitive to commodity prices, is likely to help the company maintain a steady stream of revenues. We believe that the company could benefit from increasing volumes and processing margins from the Transco pipeline-expansion projects that came into service in 2017.
Earnings Whispers
Our proven model does not show that Williams Companies is likely to beat estimates in the to-be-reported quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. That is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +9.68%. This is because the Most Accurate Estimate stands at 17 cents while the Zacks Consensus Estimate is pegged at 16 cents.
Zacks Rank: Currently, Williams Companies carries a Zacks Rank #4 (Sell). While a positive ESP bodes well for the company, a Zacks Rank #4 reduces the chances of an earnings beat. Notably, we caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Estimates
While earnings beat looks uncertain for Williams Companies, one can consider firms from the energy space that have the right combination of elements to beat estimates in the quarter to be reported:
Murphy Oil Corporation (MUR - Free Report) has an Earnings ESP of +5.99% and a Zacks Rank #2. The company is anticipated to report second-quarter earnings on Aug 8. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jones Energy, Inc. (JONE - Free Report) has an Earnings ESP of +13.97% and a Zacks Rank #3. The firm is expected to release second-quarter results on Aug 2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>