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Williams Companies (WMB) Q3 Earnings: What's in the Cards?

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Energy infrastructure provider, The Williams Companies, Inc. (WMB - Free Report) is set to release third-quarter 2017 results after the closing bell on Nov 1.

In the preceding quarter, the Tulsa, OK-based company delivered a negative earnings surprise of 31.6% owing to unfavorable changes in income tax provision. For the trailing four quarters, the company has an average negative earnings surprise of 13%.

Let’s see how things are shaping up for this announcement.

What the Zacks Model Predicts?

Our proven model does not conclusively show that Williams Companies is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. 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.

 Zacks ESP: Its Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -0.36%.

Zacks Rank: Williams Companies’ Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors at Play

We believe the following factors can influence third-quarter results.

The Transco expansion projects have been placed into service. Also, recent higher average crude oil prices can lead to higher natural gas liquids (NGLs) margins. Moreover, strong growth in production in the Northeast region may have resulted in higher transport volume for the company. The company also dominated the West American gas transportation with the help of its Northwest Pipeline. All these can help the company to post impressive results this quarter. However, the divestiture of the Geismar Plant and Canadian assets can offset the positives and affect year-over-year results.

Q3 Price Performance

Williams Companies has lost 0.9% of its value in the third quarter against 2% growth of its industry.

Stocks to Consider         

Here are some companies that you may consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Canadian Natural Resources Limited (CNQ - Free Report) is an exploration and production company. It has an Earnings ESP of +1.08% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Denbury Resources Inc. is an exploration and production company based in Plano, TX. It has an Earnings ESP of +100.00% and a Zacks Rank #2.

Cenovus Energy Inc (CVE - Free Report) is an integrated oil major from Canada. The company has an Earnings ESP of +40.0% and a Zacks Rank #2.

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