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Can Williams (WMB) Maintain Its Earnings Beat Streak in Q4?
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The Williams Companies, Inc. (WMB - Free Report) is set to release fourth-quarter results on Feb 14. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 47 cents per share on revenues of $2.8 billion.
Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance in the December quarter. But it’s worth taking a look at Williams’ previous-quarter results first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, the energy infrastructure provider beat the consensus mark on the back of growth in its core infrastructure businesses. Williams had reported adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate of 40 cents. However, revenues of $2.6 billion generated by the firm came in $8 million below the consensus mark due to lower-than-expected gathering volumes in the Northeast G&P and the West segments.
WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 13.7%, on average. This is depicted in the graph below:
Williams Companies, Inc. (The) Price and EPS Surprise
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates an 11.3% fall year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 4.8% decrease from the year-ago period.
Factors to Consider
Williams’ Transmission & Gulf of Mexico unit — which includes the company’s crown jewel and the nation’s largest and fastest-growing natural gas pipeline system, Transco — is expected to have done well in the to-be-reported quarter. Echoing the segment’s healthy dynamics in the deepwater business and benefits associated with accretive acquisitions, the Zacks Consensus Estimate for the quarter’s adjusted EBITDA is pegged at $739 million. The number suggests a 5.6% increase from a profit of $700 million reported in the year-ago quarter.
Additionally, the adjusted EBITDA consensus mark for Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — suggests a 6.3% year-over-year gain. The bullish view is based on an estimated increase in service revenues.
However, as a counter to these factors, lower earnings from the West segment are likely to have hurt Williams’ results due to lower natural gas prices and NGL margins. As a result, the Zacks Consensus Estimate for WMB’s West segment — comprising interstate natural gas pipeline and other gathering and processing assets in the Western region of the United States — is expected to have generated adjusted EBITDA of $313 million, down 4% from the year-earlier level.
What Does Our Model Say?
The proven Zacks model does not conclusively show that The Williams Companies is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
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, for this company is -0.82%.
Zacks Rank: The Williams Companies currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for WMB, here are some firms from the energy space that you may want to consider on the basis of our model:
Energy Transfer LP (ET - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 14.
The 2024 Zacks Consensus Estimate for Energy Transfer indicates 18.1% year-over-year earnings per share growth. Valued at around $43.9 billion, ET has gained 8.8% in a year.
USA Compression Partners, LP (USAC - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 13.
The 2024 Zacks Consensus Estimate for USA Compression Partners indicates 100% year-over-year earnings per share growth. Valued at around $2.4 billion, USAC has gained 14.6% in a year.
Suncor Energy (SU - Free Report) has an Earnings ESP of +0.64% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 21.
Suncor Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 15.7%, on average. Valued at around $41.3 billion, SU has lost 3.6% in a year.
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Can Williams (WMB) Maintain Its Earnings Beat Streak in Q4?
The Williams Companies, Inc. (WMB - Free Report) is set to release fourth-quarter results on Feb 14. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 47 cents per share on revenues of $2.8 billion.
Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance in the December quarter. But it’s worth taking a look at Williams’ previous-quarter results first.
Highlights of Q3 Earnings & Surprise History
In the last reported quarter, the energy infrastructure provider beat the consensus mark on the back of growth in its core infrastructure businesses. Williams had reported adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate of 40 cents. However, revenues of $2.6 billion generated by the firm came in $8 million below the consensus mark due to lower-than-expected gathering volumes in the Northeast G&P and the West segments.
WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 13.7%, on average. This is depicted in the graph below:
Williams Companies, Inc. (The) Price and EPS Surprise
Williams Companies, Inc. (The) price-eps-surprise | Williams Companies, Inc. (The) Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates an 11.3% fall year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 4.8% decrease from the year-ago period.
Factors to Consider
Williams’ Transmission & Gulf of Mexico unit — which includes the company’s crown jewel and the nation’s largest and fastest-growing natural gas pipeline system, Transco — is expected to have done well in the to-be-reported quarter. Echoing the segment’s healthy dynamics in the deepwater business and benefits associated with accretive acquisitions, the Zacks Consensus Estimate for the quarter’s adjusted EBITDA is pegged at $739 million. The number suggests a 5.6% increase from a profit of $700 million reported in the year-ago quarter.
Additionally, the adjusted EBITDA consensus mark for Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — suggests a 6.3% year-over-year gain. The bullish view is based on an estimated increase in service revenues.
However, as a counter to these factors, lower earnings from the West segment are likely to have hurt Williams’ results due to lower natural gas prices and NGL margins. As a result, the Zacks Consensus Estimate for WMB’s West segment — comprising interstate natural gas pipeline and other gathering and processing assets in the Western region of the United States — is expected to have generated adjusted EBITDA of $313 million, down 4% from the year-earlier level.
What Does Our Model Say?
The proven Zacks model does not conclusively show that The Williams Companies is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
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, for this company is -0.82%.
Zacks Rank: The Williams Companies currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for WMB, here are some firms from the energy space that you may want to consider on the basis of our model:
Energy Transfer LP (ET - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #1. The firm is scheduled to release earnings on Feb 14.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The 2024 Zacks Consensus Estimate for Energy Transfer indicates 18.1% year-over-year earnings per share growth. Valued at around $43.9 billion, ET has gained 8.8% in a year.
USA Compression Partners, LP (USAC - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 13.
The 2024 Zacks Consensus Estimate for USA Compression Partners indicates 100% year-over-year earnings per share growth. Valued at around $2.4 billion, USAC has gained 14.6% in a year.
Suncor Energy (SU - Free Report) has an Earnings ESP of +0.64% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 21.
Suncor Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 15.7%, on average. Valued at around $41.3 billion, SU has lost 3.6% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.