Williams Readjusted, Stays a Buy
Williams Companies' (WMB - Analyst Report) recent quarterly results, while below our estimates, were above the year-earlier levels. The year-over-year increase resulted from strong performance in the E&P segment, partially offset by lower NGL sales volumes in the midstream segment.
In the wake of the lower energy prices and a slower economy, Williams reduced its 2008 and 2009 capital spending and profit forecasts. However, we continue to believe that the company is well positioned to cope with the current downturn given the attractive growth opportunities in its low-risk E&P business and continued strength in NGL margins.
As such, our Buy recommendation remains unchanged, though we have reduced our estimates to reflect a lower commodity-price deck.