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William Companies' (WMB) Q1 Earnings: A Beat in the Cards?

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The Williams Companies, Inc. (WMB - Free Report) is set to release first-quarter 2018 results after the closing bell on May 2.

In the preceding quarter, the Tulsa, OK-based company’s earnings met the Zacks Consensus Estimate. Williams Companies has a dismal record of pulling an earnings surprise. It has not beaten estimates in any of the trailing four quarters, delivering an average negative earnings surprise of 29.83%.

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

Factors at Play

Williams Companies’ midstream subsidiary William Partners, L.P. , which is less sensitive to commodity prices, helps the company to maintain a steady stream of revenues. Analysts polled by Zacks expect $2,087 million revenues for the quarter under review compared with $1,988 million in the prior-year quarter. We believe that the company could benefit from increasing volumes and processing margins from the Transco pipeline-expansion projects, placed into service in 2017.

The company is expected to benefit from the Northeast G&P operating region on the back of high throughput volumes and acquisition of stakes in two Marcellus Shale gathering systems.

Williams also increased its stake in the Williams Partners subsidiary to 74%. This positioned the company for long-term sustainable growth while solidifying investment-grade credit ratings of its subsidiary.

What the Zacks Model Unveils

Our proven model also shows that Williams Companies is likely to beat earnings in the to-be-reported quarter because it has the right combination of two key ingredients.

Zacks ESP: Earnings ESP for this company is +8.33%. This is because the Most Accurate estimate of 23 cents is pegged higher than the Zacks Consensus Estimate of 21 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Williams Companies carries a Zacks Rank #3 (Hold) which, when combined with a positive ESP, makes us confident of an earnings beat.

Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Other Energy Stocks with Favorable Combination

Williams Companies is not the only energy firm looking up this earnings season. Here are some companies from the energy space, which, according to our model, also have the right combination of elements to post an earnings beat this quarter:

EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +4.07% and a Zacks Rank #1. The company is anticipated to release earnings on May 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Comstock Resources, Inc. (CRK - Free Report) has an Earnings ESP of +51.83% and a Zacks Rank #2. The independent oil and gas explorer is anticipated to release earnings on May 14.

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