We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Williams Companies, Inc. The (WMB) Down 1.7% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Williams Companies, Inc. The (WMB - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Williams Companies, Inc. The due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Williams Q2 Earnings Match Estimates, Increase Y/Y
Williamsreported second-quarter 2021 adjusted earnings per share (EPS) of 27 cents, meeting the Zacks Consensus Estimate. Reported earnings were higher than the year-ago bottom line of 25 cents per share.
The latest bottom-line result can be attributed to higher-than-expected contributions from its two segments. Adjusted EBITDA from the West and the Northeast G&P units totaled $231 million and $409 million each, ahead of their respective Zacks Consensus Estimate of $228 million and $402 million.
However, the results were partially offset by lower-than-anticipated contribution from the Transmission & Gulf of Mexico segment. Adjusted EBITDA from the segment summed $648 million, falling short of the Zacks Consensus Estimate of $669 million.
For the quarter ended Jun 30, the company’s revenues of $2.28 billion missed the Zacks Consensus Estimate by 9.87%. However, the same increased from the year-ago figure of $1.78 billion.
Takeaways
Adjusted EBITDA was $1.432 billion in the quarter under review, reflecting an increase of 6% from the level in the corresponding period of 2020. Cash flow from operations totaled $1.06 billion compared with $1.14 billion in the prior-year period.
Segmental Analysis
Transmission & Gulf of Mexico: Comprising Williams’ massive Transco pipeline system and the Northwest Pipeline, the segment generated adjusted EBITDA of $648 million, higher than the year-ago quarter’s $617 million. Gains in service revenues, healthy commodity margins and higher natural gas transmission service revenues related to recent expansion projects drove the results.
West: This segment includes gathering and processing assets in the Western region of the United States. It delivered an adjusted EBITDA of $231 million, which is 8.33% lower than $252 million recorded in the year-earlier quarter. Results were impacted by reduced service revenues, indicating slashed gathering volumes, lower Barnett deferred revenue amortization and the absence of a deficiency fee.
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 an adjusted EBITDA of $409 million, up 12.7% from the prior-year quarter’s $363 million. Increased gathering volumes on its Bradford and Marcellus South systems, and higher equity-method investment contributions boosted the results.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses increased 44% to $1.68 billion from $1.17 billion a year ago, primarily due to higher product expenses, operating and maintenance expenses as well as depreciation and amortization expenses.
Williams’ total capital expenditure was $460 million in the second quarter, up from $363 million a year ago. As of Jun 30, 2021, the company had cash and cash equivalents worth $1.2 billion and a long-term debt of $21.1 billion with a debt-to-capitalization of 64.7%.
2021 Guidance
The company projects full-year adjusted EBITDA at the upper end of the previously raised guided range of $5.2-$5.4 billion. It reiterates its growth capital spending in the band of $1-$1.2 billion. It expects to generate a positive free cash flow, which will allow it to maintain its financial stability.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Williams Companies, Inc. The has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Williams Companies, Inc. The has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Williams Companies, Inc. The (WMB) Down 1.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Williams Companies, Inc. The (WMB - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Williams Companies, Inc. The due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Williams Q2 Earnings Match Estimates, Increase Y/Y
Williamsreported second-quarter 2021 adjusted earnings per share (EPS) of 27 cents, meeting the Zacks Consensus Estimate. Reported earnings were higher than the year-ago bottom line of 25 cents per share.
The latest bottom-line result can be attributed to higher-than-expected contributions from its two segments. Adjusted EBITDA from the West and the Northeast G&P units totaled $231 million and $409 million each, ahead of their respective Zacks Consensus Estimate of $228 million and $402 million.
However, the results were partially offset by lower-than-anticipated contribution from the Transmission & Gulf of Mexico segment. Adjusted EBITDA from the segment summed $648 million, falling short of the Zacks Consensus Estimate of $669 million.
For the quarter ended Jun 30, the company’s revenues of $2.28 billion missed the Zacks Consensus Estimate by 9.87%. However, the same increased from the year-ago figure of $1.78 billion.
Takeaways
Adjusted EBITDA was $1.432 billion in the quarter under review, reflecting an increase of 6% from the level in the corresponding period of 2020. Cash flow from operations totaled $1.06 billion compared with $1.14 billion in the prior-year period.
Segmental Analysis
Transmission & Gulf of Mexico: Comprising Williams’ massive Transco pipeline system and the Northwest Pipeline, the segment generated adjusted EBITDA of $648 million, higher than the year-ago quarter’s $617 million. Gains in service revenues, healthy commodity margins and higher natural gas transmission service revenues related to recent expansion projects drove the results.
West: This segment includes gathering and processing assets in the Western region of the United States. It delivered an adjusted EBITDA of $231 million, which is 8.33% lower than $252 million recorded in the year-earlier quarter. Results were impacted by reduced service revenues, indicating slashed gathering volumes, lower Barnett deferred revenue amortization and the absence of a deficiency fee.
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 an adjusted EBITDA of $409 million, up 12.7% from the prior-year quarter’s $363 million. Increased gathering volumes on its Bradford and Marcellus South systems, and higher equity-method investment contributions boosted the results.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses increased 44% to $1.68 billion from $1.17 billion a year ago, primarily due to higher product expenses, operating and maintenance expenses as well as depreciation and amortization expenses.
Williams’ total capital expenditure was $460 million in the second quarter, up from $363 million a year ago. As of Jun 30, 2021, the company had cash and cash equivalents worth $1.2 billion and a long-term debt of $21.1 billion with a debt-to-capitalization of 64.7%.
2021 Guidance
The company projects full-year adjusted EBITDA at the upper end of the previously raised guided range of $5.2-$5.4 billion. It reiterates its growth capital spending in the band of $1-$1.2 billion. It expects to generate a positive free cash flow, which will allow it to maintain its financial stability.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Williams Companies, Inc. The has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Williams Companies, Inc. The has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.