Williams Companies, Inc. (WMB - Free Report) reported third-quarter 2019 adjusted earnings per share (EPS) from continuing operations of 26 cents, surpassing both the Zacks Consensus Estimate and the prior-year profit of 24 cents. Strong contribution from its Atlantic-Gulf and Northeast G&P segments led to this outperformance.
However, for the quarter ended Sep 30, the company’s revenues of $2 billion lagged the Zacks Consensus Estimate of $2.09 billion and also decreased 13% from $2.30 billion a year ago owing to weaker West segment sales.
Key Takeaways
Distributable cash flows came in at $822 million, up 8% from the year-ago number of $764 million. Adjusted EBITDA was $1,274 million in the quarter under review compared with $1,196 million in the corresponding period of 2018. Cash flow from operations totalled $858 million compared with $746 million in the prior-year period. Higher revenues from Transco expansion projects drove cash flow in the quarter.
Segmental Analysis
Atlantic-Gulf: Comprising Williams’ Transco Pipeline and properties in the Gulf Coast region, the segment generated adjusted EBITDA of $611 million, up 27.3% from $480 million in the year-ago quarter. The metric also beat the Zacks Consensus Estimate of $540 million. This improved performance was driven by Transco expansion projects including Atlantic Sunrise and Gulf Connector that became functional in October 2018 and January 2019, respectively.
West: This segment includes the Northwest pipeline and operations in various regions, such as Colorado, Mid-Continent and Haynesville Shale among others. It delivered adjusted EBITDA of $313 million, which is 26.2% lower than $424 million registered in the year-earlier quarter. The figure also missed the Zacks Consensus Estimate of $384 million. Lower natural gas liquid margins impacted the results.
Northeast G&P: Engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions, the segment generated adjusted EBITDA of $343 million, up 22% from the prior-year quarter’s $281 million. The same even surpassed the Zacks Consensus Estimate of $338 million. Expanded volumes from the Susquehanna Supply Hub and higher service revenues from Ohio Valley along with the acquisition of Utica East Ohio Midstream drove the results.
Others: Adjusted EBITDA of $7 million from this segment plunged 36.4% from $11 million in third-quarter 2018.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses decreased 24% to $1,371 million from $1,802 million a year ago owing to lower product expenses.
Williams’ total capital expenditure was $850 million in the third quarter. As of Sep 30, the company had cash and cash equivalents of $247 million and a long-term debt of $20,719 million with a debt-to-capitalization ratio of 55.13%.
2019 Guidance Reiterated
The company reaffirmed its full-year adjusted EBITDA guidance in the band of $4,850-$5,150 million with distributable cash flow within $2,900-$3,300 million. Adjusted EPS view for the year is expected in the range of 83 cents to $1.07.
Zacks Rank & Key Picks
Williams has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Subsea 7 SA, Inc. (SUBCY - Free Report) , Phillips 66 (PSX - Free Report) and Sunoco LP (SUN - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Williams Companies, Inc. (WMB - Free Report) reported third-quarter 2019 adjusted earnings per share (EPS) from continuing operations of 26 cents, surpassing both the Zacks Consensus Estimate and the prior-year profit of 24 cents. Strong contribution from its Atlantic-Gulf and Northeast G&P segments led to this outperformance.
However, for the quarter ended Sep 30, the company’s revenues of $2 billion lagged the Zacks Consensus Estimate of $2.09 billion and also decreased 13% from $2.30 billion a year ago owing to weaker West segment sales.
Key Takeaways
Distributable cash flows came in at $822 million, up 8% from the year-ago number of $764 million. Adjusted EBITDA was $1,274 million in the quarter under review compared with $1,196 million in the corresponding period of 2018. Cash flow from operations totalled $858 million compared with $746 million in the prior-year period. Higher revenues from Transco expansion projects drove cash flow in the quarter.
Segmental Analysis
Atlantic-Gulf: Comprising Williams’ Transco Pipeline and properties in the Gulf Coast region, the segment generated adjusted EBITDA of $611 million, up 27.3% from $480 million in the year-ago quarter. The metric also beat the Zacks Consensus Estimate of $540 million. This improved performance was driven by Transco expansion projects including Atlantic Sunrise and Gulf Connector that became functional in October 2018 and January 2019, respectively.
West: This segment includes the Northwest pipeline and operations in various regions, such as Colorado, Mid-Continent and Haynesville Shale among others. It delivered adjusted EBITDA of $313 million, which is 26.2% lower than $424 million registered in the year-earlier quarter. The figure also missed the Zacks Consensus Estimate of $384 million. Lower natural gas liquid margins impacted the results.
Northeast G&P: Engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions, the segment generated adjusted EBITDA of $343 million, up 22% from the prior-year quarter’s $281 million. The same even surpassed the Zacks Consensus Estimate of $338 million. Expanded volumes from the Susquehanna Supply Hub and higher service revenues from Ohio Valley along with the acquisition of Utica East Ohio Midstream drove the results.
Others: Adjusted EBITDA of $7 million from this segment plunged 36.4% from $11 million in third-quarter 2018.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses decreased 24% to $1,371 million from $1,802 million a year ago owing to lower product expenses.
Williams’ total capital expenditure was $850 million in the third quarter. As of Sep 30, the company had cash and cash equivalents of $247 million and a long-term debt of $20,719 million with a debt-to-capitalization ratio of 55.13%.
2019 Guidance Reiterated
The company reaffirmed its full-year adjusted EBITDA guidance in the band of $4,850-$5,150 million with distributable cash flow within $2,900-$3,300 million. Adjusted EPS view for the year is expected in the range of 83 cents to $1.07.
Zacks Rank & Key Picks
Williams has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Subsea 7 SA, Inc. (SUBCY - Free Report) , Phillips 66 (PSX - Free Report) and Sunoco LP (SUN - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Download Free Report Now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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