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Will Williams (WMB) Deliver a Beat This Earnings Season?
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The Williams Companies, Inc. (WMB - Free Report) is set to release fourth-quarter results on Feb 21. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 31 cents per share on revenues of $2.8 billion.
Let’s delve into the factors that might have influenced the pipeline operator’s performance in the December quarter. But it’s worth taking a look at Williams’ previous-quarter release first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the energy infrastructure provider beat the consensus mark on impressive contributions from all three segments of the company. Williams had reported adjusted earnings per share of 34 cents, ahead of the Zacks Consensus Estimate by 6 cents. Revenues of $2.5 billion generated by the firm had also come in above the Zacks Consensus Estimate of $2.3 billion.
WMB topped the Zacks Consensus Estimate by an average of 10.8% in the trailing four quarters, including a 21.4% beat in Q3. This is depicted in the graph below:
Williams Companies, Inc. The Price and EPS Surprise
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained the same in the past seven days. The estimated figure indicates no change year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 34.8% increase from the year-ago period.
Factors to Consider
Williams’ Transmission & Gulf of Mexico segment — which includes the company’s crown jewel and the nation’s largest and fastest-growing natural gas pipeline system Transco — is expected to generate strong profits in the fourth quarter. The unit should benefit from the expansion projects around Transco being placed into service over the past few years and the additional volumes from these takeaway infrastructures on the back of strong drilling activity. The Zacks Consensus Estimate for the segment’s adjusted EBITDA is pegged at $643 million for the to-be-reported quarter.
The Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — delivered adjusted EBITDA of $442 million in the September quarter, up 11.6% year over year. The segment is expected to have continued its good performance in the to-be-reported quarter on the back of increased gathering volumes. The consensus mark for the segment’s adjusted EBITDA is pegged at $448 million.
On a somewhat bearish note, Williams’ total costs and expenses in the third quarter increased more than 64% year over year to $2.1 billion. The upward cost trajectory is likely to have continued in the fourth quarter due to higher product costs. This is expected to have somewhat dented the company’s to-be-reported earnings.
What Does Our Model Say?
The proven Zacks model does not conclusively predict that Williams is likely to beat fourth-quarter estimates. 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. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.96%.
Zacks Rank: Williams currently carries a Zacks Rank #3.
Stocks to Consider
Here are some firms from the energy company that you may want to consider on the basis of our model:
Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +20.43% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 24.
PBA is valued at around $18.3 billion. Pembina Pipeline topped the Zacks Consensus Estimate in the trailing four quarters, with the average beat being 4.2%. PBA has gained some 24.2% in a year.
Viper Energy Partners LP (VNOM - Free Report) has an Earnings ESP of +14.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
VNOM topped the Zacks Consensus Estimate in the trailing four quarters with the average beat being 103.1%, including a 133.3% beat in Q3. Viper Energy Partners has rallied around 72.6% in a year.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
FANG beat earnings estimates in each of the last four quarters — the earnings surprise being 11.7%, on average. Diamondback has surged around 92.5% in a year.
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Will Williams (WMB) Deliver a Beat This Earnings Season?
The Williams Companies, Inc. (WMB - Free Report) is set to release fourth-quarter results on Feb 21. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 31 cents per share on revenues of $2.8 billion.
Let’s delve into the factors that might have influenced the pipeline operator’s performance in the December quarter. But it’s worth taking a look at Williams’ previous-quarter release first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the energy infrastructure provider beat the consensus mark on impressive contributions from all three segments of the company. Williams had reported adjusted earnings per share of 34 cents, ahead of the Zacks Consensus Estimate by 6 cents. Revenues of $2.5 billion generated by the firm had also come in above the Zacks Consensus Estimate of $2.3 billion.
WMB topped the Zacks Consensus Estimate by an average of 10.8% in the trailing four quarters, including a 21.4% beat in Q3. 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
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line has remained the same in the past seven days. The estimated figure indicates no change year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 34.8% increase from the year-ago period.
Factors to Consider
Williams’ Transmission & Gulf of Mexico segment — which includes the company’s crown jewel and the nation’s largest and fastest-growing natural gas pipeline system Transco — is expected to generate strong profits in the fourth quarter. The unit should benefit from the expansion projects around Transco being placed into service over the past few years and the additional volumes from these takeaway infrastructures on the back of strong drilling activity. The Zacks Consensus Estimate for the segment’s adjusted EBITDA is pegged at $643 million for the to-be-reported quarter.
The Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — delivered adjusted EBITDA of $442 million in the September quarter, up 11.6% year over year. The segment is expected to have continued its good performance in the to-be-reported quarter on the back of increased gathering volumes. The consensus mark for the segment’s adjusted EBITDA is pegged at $448 million.
On a somewhat bearish note, Williams’ total costs and expenses in the third quarter increased more than 64% year over year to $2.1 billion. The upward cost trajectory is likely to have continued in the fourth quarter due to higher product costs. This is expected to have somewhat dented the company’s to-be-reported earnings.
What Does Our Model Say?
The proven Zacks model does not conclusively predict that Williams is likely to beat fourth-quarter estimates. 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. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.96%.
Zacks Rank: Williams currently carries a Zacks Rank #3.
Stocks to Consider
Here are some firms from the energy company that you may want to consider on the basis of our model:
Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +20.43% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 24.
You can see the complete list of today’s Zacks #1 Rank stocks here.
PBA is valued at around $18.3 billion. Pembina Pipeline topped the Zacks Consensus Estimate in the trailing four quarters, with the average beat being 4.2%. PBA has gained some 24.2% in a year.
Viper Energy Partners LP (VNOM - Free Report) has an Earnings ESP of +14.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
VNOM topped the Zacks Consensus Estimate in the trailing four quarters with the average beat being 103.1%, including a 133.3% beat in Q3. Viper Energy Partners has rallied around 72.6% in a year.
Diamondback Energy, Inc. (FANG - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
FANG beat earnings estimates in each of the last four quarters — the earnings surprise being 11.7%, on average. Diamondback has surged around 92.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.