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Williams Companies, Inc. (The) (WMB) Up 2.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Williams Companies, Inc. (The) (WMB - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Williams Companies, Inc. (The) due for a pullback? Before we dive into how investors and analysts have reacted as 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.
Williams Q3 Earnings Outpace Estimate, Sales miss
The Williams Companies reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The bottom line declined from the year-ago period’s reported figure of 48 cents due to lower-than-expected contributions from two major segments — West and Gas, and NGL Marketing Services.
Williams’ revenues of $2.56 billion missed the Zacks Consensus Estimate of $2.57 billion due to lower product sales. The top line also decreased from the year-ago quarter’s reported figure of $3.02 billion.
Key Takeaways
Adjusted EBITDA totaled $1.65 billion in the quarter under review, up 0.9% year over year. The figure also beat our estimate of $1.51 billion. Cash flow from operations amounted to $1.23 billion, down 17.4% from that recorded in the corresponding quarter of 2022.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $754 billion, up 12.4% from the year-ago quarter’s level. This was largely driven by higher service revenues. The reported figure also outpaced our prediction of $513.5 million.
West: This segment registered an adjusted EBITDA of $315 million, down 16.4% from $377 million recorded in the year-earlier quarter. The figure, however, beat our estimate of $229 million. This underperformance can be attributed to lower NYMEX-based rates in the Barnett.
Northeast G&P: Adjusted EBITDA for this segment totaled $485 million, up 4.5% from the prior-year quarter’s level of $464 million. The figure also beat our estimate of $430.5 million. This uptick in performance can be attributed to increased gathering rates and higher volumes.
Gas & NGL Marketing Services: This unit generated an adjusted EBITDA profit of $16 million, down from the prior-year quarter’s level of $38 million. The reported figure missed our projection of $274.1 million.
Costs, Capex & Balance Sheet
Total costs and expenses were $1.57 billion in the reported quarter.
Total capital expenditure was $690 million compared with $841 million a year ago. As of Sep 30, 2023, the company had cash and cash equivalents of $2.1 billion, and a long-term debt of $22.8 billion, with a debt-to-capitalization of 61.4%.
Guidance
WMB expects full-year adjusted EBITDA to be in the range of $6.6-$6.8 billion. Growth capital spending is anticipated to be in the band of $1.6-$1.9 billion. Williams expects to achieve a leverage ratio mid-point of 3.65. The guidance for 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Williams Companies, Inc. (The) has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Williams Companies, Inc. (The) has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Williams Companies, Inc. (The) is part of the Zacks Oil and Gas - Production and Pipelines industry. Over the past month, MPLX LP (MPLX - Free Report) , a stock from the same industry, has gained 2.1%. The company reported its results for the quarter ended September 2023 more than a month ago.
MPLX LP reported revenues of $2.91 billion in the last reported quarter, representing a year-over-year change of -14.4%. EPS of $0.89 for the same period compares with $0.96 a year ago.
MPLX LP is expected to post earnings of $0.94 per share for the current quarter, representing a year-over-year change of +20.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
MPLX LP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Williams Companies, Inc. (The) (WMB) Up 2.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Williams Companies, Inc. (The) (WMB - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Williams Companies, Inc. (The) due for a pullback? Before we dive into how investors and analysts have reacted as 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.
Williams Q3 Earnings Outpace Estimate, Sales miss
The Williams Companies reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The bottom line declined from the year-ago period’s reported figure of 48 cents due to lower-than-expected contributions from two major segments — West and Gas, and NGL Marketing Services.
Williams’ revenues of $2.56 billion missed the Zacks Consensus Estimate of $2.57 billion due to lower product sales. The top line also decreased from the year-ago quarter’s reported figure of $3.02 billion.
Key Takeaways
Adjusted EBITDA totaled $1.65 billion in the quarter under review, up 0.9% year over year. The figure also beat our estimate of $1.51 billion. Cash flow from operations amounted to $1.23 billion, down 17.4% from that recorded in the corresponding quarter of 2022.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $754 billion, up 12.4% from the year-ago quarter’s level. This was largely driven by higher service revenues. The reported figure also outpaced our prediction of $513.5 million.
West: This segment registered an adjusted EBITDA of $315 million, down 16.4% from $377 million recorded in the year-earlier quarter. The figure, however, beat our estimate of $229 million. This underperformance can be attributed to lower NYMEX-based rates in the Barnett.
Northeast G&P: Adjusted EBITDA for this segment totaled $485 million, up 4.5% from the prior-year quarter’s level of $464 million. The figure also beat our estimate of $430.5 million. This uptick in performance can be attributed to increased gathering rates and higher volumes.
Gas & NGL Marketing Services: This unit generated an adjusted EBITDA profit of $16 million, down from the prior-year quarter’s level of $38 million. The reported figure missed our projection of $274.1 million.
Costs, Capex & Balance Sheet
Total costs and expenses were $1.57 billion in the reported quarter.
Total capital expenditure was $690 million compared with $841 million a year ago. As of Sep 30, 2023, the company had cash and cash equivalents of $2.1 billion, and a long-term debt of $22.8 billion, with a debt-to-capitalization of 61.4%.
Guidance
WMB expects full-year adjusted EBITDA to be in the range of $6.6-$6.8 billion. Growth capital spending is anticipated to be in the band of $1.6-$1.9 billion. Williams expects to achieve a leverage ratio mid-point of 3.65. The guidance for 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Williams Companies, Inc. (The) has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Williams Companies, Inc. (The) has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Williams Companies, Inc. (The) is part of the Zacks Oil and Gas - Production and Pipelines industry. Over the past month, MPLX LP (MPLX - Free Report) , a stock from the same industry, has gained 2.1%. The company reported its results for the quarter ended September 2023 more than a month ago.
MPLX LP reported revenues of $2.91 billion in the last reported quarter, representing a year-over-year change of -14.4%. EPS of $0.89 for the same period compares with $0.96 a year ago.
MPLX LP is expected to post earnings of $0.94 per share for the current quarter, representing a year-over-year change of +20.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
MPLX LP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.