We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Williams (WMB) Q2 Earnings Beat Estimates, Revenues Lag
Read MoreHide Full Article
The Williams Companies, Inc. (WMB - Free Report) reported second-quarter 2024 adjusted earnings per share of 43 cents, which beat the Zacks Consensus Estimate of 39 cents. The Transmission & Gulf of Mexico and West segments delivered strong year-over-year results, leading to the outperformance. The bottom line also marginally increased from the year-ago period’s level of 42 cents per share despite the weak year-over-year performance of the Northeast G&P Segment.
Williams’ revenues of $2.3 billion missed the Zacks Consensus Estimate of $2.6 billion and decreased from the year-ago quarter’s reported figure of $2.5 billion. The underperformance was due to decreased service revenues (related to commodity considerations) and net losses from commodity derivatives on a year-over-year basis.
In the quarter, Williams optimized its portfolio by exiting the company’s position in the Aux Sable joint venture and consolidating its ownership interest in the Gulf of Mexico Discovery system. The company also completed Transco's Regional Energy Access project into full service ahead of schedule on Aug 1 along with the completion of the Marcellus South and MountainWest Uinta Basin expansions.
Additionally, WMB signed a precedent agreement for Transco's Gillis West expansion in the quarter under review. The company commenced construction on the Louisiana Energy Gateway gathering, treating and carbon capture & sequestration project, as well as on Transco's Texas to Louisiana Energy Pathway expansion.
Williams Companies, Inc. (The) Price, Consensus and EPS Surprise
Adjusted EBITDA totaled $1.7 billion in the quarter under review, up 3.5% year over year. This was driven by positive net contributions from acquisitions and expansion projects.
Cash flow from operations amounted to $1.3 billion, down 7.1 % from the corresponding quarter of 2023. This decrease was due to unfavorable net changes in working capital and derivative collateral requirements.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $812 million, up 8.6% from the year-ago quarter’s level. This was fueled by favorable net contributions from the Gulf Coast Storage acquisition and the Regional Energy Access expansion project, along with higher equity AFUDC.
West: This segment focuses on the gathering and processing of assets in the Western United States. Adjusted EBITDA for this segment totaled $319 million, up 2.2% from the prior-year quarter’s level of $312 million.This strong performance can be attributed to the acquisitions in the DJ Basin and higher volumes on the Overland Pass Pipeline.
Northeast G&P: This segment registered an adjusted EBITDA of $479 million, down 7% from $515 million in the year-earlier quarter. This decrease can be linked to lower gathering volumes.
Gas & NGL Marketing Services: This unit reported an adjusted EBITDA loss of $14 million, an improvement from the $16 million loss in the prior-year quarter.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses of $1.6 billion increased almost 1.7% from the year-ago quarter’s figure.
Total capital expenditure was $1.1 billion compared with $1.2 billion a year ago. As of Jun 30, 2024, the company had cash and cash equivalents of $55 million and a long-term debt of $24.1 billion, with a debt-to-capitalization of 62%.
Strategic Divestiture & Gulf of Mexico Acquisition
The Oklahoma-based energy infrastructure provider has taken steps to strengthen its financial position and focus on the company’s core operations. WMB divested its 14% stake in a joint venture with Aux Sable for $160 million. This non-operating venture, which includes a processing and fractionation facility in Illinois and a gas gathering pipeline in North Dakota, exposed Williams to volatile cash flows due to commodity price fluctuations.
Simultaneously, the company acquired Phillips 66's (PSX - Free Report) 40% stake in the Discovery pipeline system in the Gulf of Mexico for $170 million, achieving full ownership of the pipeline. This acquisition also includes PSX's Dauphin Island Gathering Partners system.
These strategic moves are aimed at reducing WMB's exposure to commodity price volatility and enhancing the profitability of its growing Gulf of Mexico assets.
Guidance
Williams anticipates Adjusted EBITDA in the upper half of its 2024 guided range of $6.8 billion to $7.1 billion. The company also maintains its 2024 expectations for growth capex between $1.45 billion and $1.75 billion and maintenance capex ranging from $1.1 billion to $1.3 billion, which includes $350 million allocated for emissions reduction and modernization initiatives.
Looking ahead to 2025, Williams expects Adjusted EBITDA to be between $7.2 billion and $7.6 billion, with growth capex of $1.65 billion to $1.95 billion and maintenance capex of $750 million to $850 million, including $100 million at the midpoint for emissions reduction and modernization efforts. The company also projects a leverage ratio midpoint of 3.85x for 2024 and has increased its annual dividend by 6.1%, from $1.79 in 2023 to $1.90.
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Based in Houston, TX, Phillips 66 reported second-quarter 2024 adjusted earnings of $2.31 per share, which beat the Zacks Consensus Estimate of $2.12. However, the bottom line was lower than the year-ago quarter’s level of $3.87 per share. Total quarterly revenues of $38.9 billion beat the Zacks Consensus Estimate of $32 billion. The top line also increased from the year-ago quarter’s $35.7 billion.
As of Jun 30, 2024, cash and cash equivalents were $2.4 billion. Total debt was $19.9 billion, indicating a debt-to-capitalization of 43.4%. In the reported quarter, Phillips 66 generated $2.1 billion of net cash from operations, significantly higher than $955 million a year ago. The company’s capital expenditure and investments totaled $367 million. PXS paid out dividends of $485 million in the second quarter.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Williams (WMB) Q2 Earnings Beat Estimates, Revenues Lag
The Williams Companies, Inc. (WMB - Free Report) reported second-quarter 2024 adjusted earnings per share of 43 cents, which beat the Zacks Consensus Estimate of 39 cents. The Transmission & Gulf of Mexico and West segments delivered strong year-over-year results, leading to the outperformance. The bottom line also marginally increased from the year-ago period’s level of 42 cents per share despite the weak year-over-year performance of the Northeast G&P Segment.
Williams’ revenues of $2.3 billion missed the Zacks Consensus Estimate of $2.6 billion and decreased from the year-ago quarter’s reported figure of $2.5 billion. The underperformance was due to decreased service revenues (related to commodity considerations) and net losses from commodity derivatives on a year-over-year basis.
In the quarter, Williams optimized its portfolio by exiting the company’s position in the Aux Sable joint venture and consolidating its ownership interest in the Gulf of Mexico Discovery system. The company also completed Transco's Regional Energy Access project into full service ahead of schedule on Aug 1 along with the completion of the Marcellus South and MountainWest Uinta Basin expansions.
Additionally, WMB signed a precedent agreement for Transco's Gillis West expansion in the quarter under review. The company commenced construction on the Louisiana Energy Gateway gathering, treating and carbon capture & sequestration project, as well as on Transco's Texas to Louisiana Energy Pathway expansion.
Williams Companies, Inc. (The) Price, Consensus and EPS Surprise
Williams Companies, Inc. (The) price-consensus-eps-surprise-chart | Williams Companies, Inc. (The) Quote
Key Takeaways
Adjusted EBITDA totaled $1.7 billion in the quarter under review, up 3.5% year over year. This was driven by positive net contributions from acquisitions and expansion projects.
Cash flow from operations amounted to $1.3 billion, down 7.1 % from the corresponding quarter of 2023.
This decrease was due to unfavorable net changes in working capital and derivative collateral requirements.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $812 million, up 8.6% from the year-ago quarter’s level. This was fueled by favorable net contributions from the Gulf Coast Storage acquisition and the Regional Energy Access expansion project, along with higher equity AFUDC.
West: This segment focuses on the gathering and processing of assets in the Western United States. Adjusted EBITDA for this segment totaled $319 million, up 2.2% from the prior-year quarter’s level of $312 million.This strong performance can be attributed to the acquisitions in the DJ Basin and higher volumes on the Overland Pass Pipeline.
Northeast G&P: This segment registered an adjusted EBITDA of $479 million, down 7% from $515 million in the year-earlier quarter. This decrease can be linked to lower gathering volumes.
Gas & NGL Marketing Services: This unit reported an adjusted EBITDA loss of $14 million, an improvement from the $16 million loss in the prior-year quarter.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses of $1.6 billion increased almost 1.7% from the year-ago quarter’s figure.
Total capital expenditure was $1.1 billion compared with $1.2 billion a year ago. As of Jun 30, 2024, the company had cash and cash equivalents of $55 million and a long-term debt of $24.1 billion, with a debt-to-capitalization of 62%.
Strategic Divestiture & Gulf of Mexico Acquisition
The Oklahoma-based energy infrastructure provider has taken steps to strengthen its financial position and focus on the company’s core operations. WMB divested its 14% stake in a joint venture with Aux Sable for $160 million. This non-operating venture, which includes a processing and fractionation facility in Illinois and a gas gathering pipeline in North Dakota, exposed Williams to volatile cash flows due to commodity price fluctuations.
Simultaneously, the company acquired Phillips 66's (PSX - Free Report) 40% stake in the Discovery pipeline system in the Gulf of Mexico for $170 million, achieving full ownership of the pipeline. This acquisition also includes PSX's Dauphin Island Gathering Partners system.
These strategic moves are aimed at reducing WMB's exposure to commodity price volatility and enhancing the profitability of its growing Gulf of Mexico assets.
Guidance
Williams anticipates Adjusted EBITDA in the upper half of its 2024 guided range of $6.8 billion to $7.1 billion. The company also maintains its 2024 expectations for growth capex between $1.45 billion and $1.75 billion and maintenance capex ranging from $1.1 billion to $1.3 billion, which includes $350 million allocated for emissions reduction and modernization initiatives.
Looking ahead to 2025, Williams expects Adjusted EBITDA to be between $7.2 billion and $7.6 billion, with growth capex of $1.65 billion to $1.95 billion and maintenance capex of $750 million to $850 million, including $100 million at the midpoint for emissions reduction and modernization efforts. The company also projects a leverage ratio midpoint of 3.85x for 2024 and has increased its annual dividend by 6.1%, from $1.79 in 2023 to $1.90.
WMB currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Energy Earnings So Far
While it's early in the earnings season, there have been a few key energy releases thus far. Let’s glance through a couple of them.
Based in Houston, TX, Phillips 66 reported second-quarter 2024 adjusted earnings of $2.31 per share, which beat the Zacks Consensus Estimate of $2.12. However, the bottom line was lower than the year-ago quarter’s level of $3.87 per share. Total quarterly revenues of $38.9 billion beat the Zacks Consensus Estimate of $32 billion. The top line also increased from the year-ago quarter’s $35.7 billion.
As of Jun 30, 2024, cash and cash equivalents were $2.4 billion. Total debt was $19.9 billion, indicating a debt-to-capitalization of 43.4%. In the reported quarter, Phillips 66 generated $2.1 billion of net cash from operations, significantly higher than $955 million a year ago. The company’s capital expenditure and investments totaled $367 million. PXS paid out dividends of $485 million in the second quarter.
Liberty Energy (LBRT - Free Report) , the Denver-CO-based oil and gas equipment company, announced second-quarter 2024 adjusted earnings of 61 cents per share, which marginally beat the Zacks Consensus Estimate of 60 cents. However, LBRT’s bottom line underperformed the year-ago quarter’s reported figure of 87 cents due to a year-over-year increase in costs and expenses.
Ahead of the earnings release, Liberty’s board of directors announced a cash dividend of 7 cents per common share, payable on Sep 20, 2024, to its stockholders of record as of Sep 6. As part of its shareholder return policy, LBRT repurchased the company’s shares worth $30 million at an average price of $20.39 per share in the reported quarter. Liberty returned $41 million to its shareholders through share repurchases and cash dividends.
Houston, TX-based Halliburton Company (HAL - Free Report) , an oil and gas equipment and services provider, reported second-quarter 2024 adjusted net income per share of 80 cents, in line with the Zacks Consensus Estimate and above the year-ago quarter profit of 77 cents (adjusted). The robust numbers reflect strength in the international markets.
As of Jun 30, 2024, the company reported $2.1 billion in cash and cash equivalents and $7.6 billion in long-term debt, representing a debt-to-capitalization ratio of 43.2. HAL also bought back $250 million worth of its stock in the April-June period. The company generated $1.1 billion of cash flow from operations in the second quarter, leading to a free cash flow of $793 million.