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How is Williams Companies (WMB) Placed Ahead of Q2 Earnings?
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The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter 2020 results on Monday Aug 3, after the closing bell.
The Zacks Consensus Estimate for the to-be-reported quarter’s profit is 23 cents per share and for revenues is $2.01 billion. Against this backdrop, let’s consider the factors that are likely to impact the company’s June-quarter results.
Factors to Consider for Q2 Results
Williams’ Transmission & Gulf of Mexico and Northeast G&P segments, which collectively represents more than 70% of the company’s adjusted EBITDA, are likely to have performed well in the second quarter, a trend that most likely continued from the sequential quarter. The Transmission & Gulf of Mexico unit generated adjusted EBITDA of $669 million in the first quarter, up 5.2% year over year while the company’s Northeast G&P business contributed $370 million, up 22.5% year over year.
Courtesy of service revenue gains from the expansion projects around Transco (the country's largest gas transmission system and Williams’ core project), which has been active over the past few years, the company made a significant progress in the March quarter. This apart, benefits of a positive resolution of Transco’s settled general rate case favored segment profitability in the same period. These factors are also likely to have aided the company’s second-quarter earnings.
However, Williams’ extensive exposure to natural gas makes it highly sensitive to the commodity price. Particularly, lower gas prices in the second quarter are likely to have adversely impacted the volumes and distribution growth potential at Williams Partners, the company's largest income-generating business segment.
What Does Our Model Say?
Our proven Zacks model predicts an earnings beat for Williams this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Williams has an Earnings ESP of +5.44%.
Zacks Rank: Williams carries a Zacks Rank #3, which increases the predictive power of ESP.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, this Tulsa, OK-based energy player reported first-quarter 2020 adjusted earnings per share of 26 cents, beating the Zacks Consensus Estimate by a penny. The outperformance was attributable to a strong contribution from the company’s Transmission & Gulf of Mexico and Northeast G&P units. Moreover, the bottom line improved from the year-earlier quarter's adjusted earnings of 22 cents per share.
However, this energy infrastructure provider’s quarterly revenues of $1.91 billion missed the Zacks Consensus Estimate by 11.49% and also decreased from the year-ago figure of $2.05 billion due to weak performance at the West segment.
As far as earnings surprises are concerned, this midstream player shows a pleasant record with its bottom line having topped the Zacks Consensus Estimate thrice in the last four quarterly reports, lagging the same just once. The average surprise is 5.34%. This is depicted in the graph below:
Williams Companies, Inc. The Price and EPS Surprise
Here are some other firms worth considering from the energy space on the basis of our model, which shows that these too have the right combination of elements to beat on earnings this season:
Imperial Oil Limited (IMO - Free Report) has an Earnings ESP of +0.61% and a Zacks Rank of 3 at present. The company is scheduled to release earnings on Jul 31.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +8.37% and a Zacks Rank #3, presently. The firm is scheduled to release earnings on Aug 3.
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained an impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
How is Williams Companies (WMB) Placed Ahead of Q2 Earnings?
The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter 2020 results on Monday Aug 3, after the closing bell.
The Zacks Consensus Estimate for the to-be-reported quarter’s profit is 23 cents per share and for revenues is $2.01 billion. Against this backdrop, let’s consider the factors that are likely to impact the company’s June-quarter results.
Factors to Consider for Q2 Results
Williams’ Transmission & Gulf of Mexico and Northeast G&P segments, which collectively represents more than 70% of the company’s adjusted EBITDA, are likely to have performed well in the second quarter, a trend that most likely continued from the sequential quarter. The Transmission & Gulf of Mexico unit generated adjusted EBITDA of $669 million in the first quarter, up 5.2% year over year while the company’s Northeast G&P business contributed $370 million, up 22.5% year over year.
Courtesy of service revenue gains from the expansion projects around Transco (the country's largest gas transmission system and Williams’ core project), which has been active over the past few years, the company made a significant progress in the March quarter. This apart, benefits of a positive resolution of Transco’s settled general rate case favored segment profitability in the same period. These factors are also likely to have aided the company’s second-quarter earnings.
However, Williams’ extensive exposure to natural gas makes it highly sensitive to the commodity price. Particularly, lower gas prices in the second quarter are likely to have adversely impacted the volumes and distribution growth potential at Williams Partners, the company's largest income-generating business segment.
What Does Our Model Say?
Our proven Zacks model predicts an earnings beat for Williams this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Williams has an Earnings ESP of +5.44%.
Zacks Rank: Williams carries a Zacks Rank #3, which increases the predictive power of ESP.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, this Tulsa, OK-based energy player reported first-quarter 2020 adjusted earnings per share of 26 cents, beating the Zacks Consensus Estimate by a penny. The outperformance was attributable to a strong contribution from the company’s Transmission & Gulf of Mexico and Northeast G&P units. Moreover, the bottom line improved from the year-earlier quarter's adjusted earnings of 22 cents per share.
However, this energy infrastructure provider’s quarterly revenues of $1.91 billion missed the Zacks Consensus Estimate by 11.49% and also decreased from the year-ago figure of $2.05 billion due to weak performance at the West segment.
As far as earnings surprises are concerned, this midstream player shows a pleasant record with its bottom line having topped the Zacks Consensus Estimate thrice in the last four quarterly reports, lagging the same just once. The average surprise is 5.34%. This is depicted in the graph below:
Williams Companies, Inc. The Price and EPS Surprise
Williams Companies, Inc. The price-eps-surprise | Williams Companies, Inc. The Quote
Other Stocks to Consider
Here are some other firms worth considering from the energy space on the basis of our model, which shows that these too have the right combination of elements to beat on earnings this season:
Imperial Oil Limited (IMO - Free Report) has an Earnings ESP of +0.61% and a Zacks Rank of 3 at present. The company is scheduled to release earnings on Jul 31.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +8.37% and a Zacks Rank #3, presently. The firm is scheduled to release earnings on Aug 3.
USA Compression Partners, LP (USAC - Free Report) has an Earnings ESP of +25.00% and is Zacks #1 Ranked, currently. The firm is scheduled to release earnings on Aug 4. You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained an impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>