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Williams Companies, Inc. The (WMB) Up 8.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Williams Companies, Inc. The (WMB - Free Report) . Shares have added about 8.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Williams Companies, Inc. The due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Williams Q4 Earnings Beat Estimate, Increase Y/Y
Williams reported fourth-quarter 2021 adjusted earnings per share of 39 cents, beating the Zacks Consensus Estimate and surpassing the year-earlier period’s profit by 8 cents.
The outperformance could be tracked to higher-than-expected contributions from two major segments. Precisely, adjusted EBITDA from the Transmission & Gulf of Mexico and the Northeast G&P units totaled $685 million and $459 million, ahead of their respective Zacks Consensus Estimate of $643 million and $448 million.
Meanwhile, for the quarter ended Dec 31, the company’s revenues of $3.3 billion beat the Zacks Consensus Estimate of $2.8 billion and increased $1.2 billion from a year ago.
Key Takeaways
Adjusted EBITDA was $1.5 billion in the quarter under review, reflecting an increase of 11% from the corresponding period of 2020. Cash flow from operations totaled $1.1 billion, up 2.2% from the prior-year period. Favorable net working capital changes drove cash flow in the quarter.
Segmental Analysis
Transmission & Gulf of Mexico: Comprising Williams’ massive Transco pipeline system and Northwest Pipeline, the segment generated adjusted EBITDA of $685 million, rising 6.4% from the year-ago quarter. This unit’s performance was buoyed by service revenue gains from the expansion projects around Transco (the country's largest gas transmission system and Williams’ core initiative) being placed into service over the past few years. The positive factor was partially offset by an escalation in costs.
West: This segment includes gathering and processing assets in the Western region of the United States. It delivered adjusted EBITDA of $253 million, which is 8.7% lower than $277 million recorded in the year-earlier quarter. The deterioration in results were due to the absence of certain volume deficiency payments that was partly offset by rising volumes and rates.
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 $459 million, up 13.1% from the prior-year quarter’s $406 million. An uptick in gathering volumes and contribution from WMB’s increased ownership in Blue Racer Midstream drove the results.
Sequent: This is Williams’ newest unit following last year’s acquisition of wholesale gas trading enterprise Sequent Energy Management. The segment generated adjusted EBITDA of $169 million.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses increased 47.4% to $2.3 billion from $1.6 billion a year ago, primarily owing to spiraling product expenses.
Williams’ total capital expenditure was $371 million in the fourth quarter, down from $423 million a year ago. As of Dec 31, 2021, the company had cash and cash equivalents of $1.7 billion and a long-term debt of $21.7 billion with a debt-to-capitalization of 60.6%.
2022 Guidance
WMB guided full-year adjusted EBITDA in the band of $5.6-$6 billion with growth capital spending in the range of $1.25-$1.35 billion. Adjusted EPS for the year is expected in the range of $1.29 to $1.54. Further, Williams expects to grow its dividend at an annual rate of 4% and aims toward a dividend coverage ratio of 2.1x at the midpoint of its 2022 guidance.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 7.39% due to these changes.
VGM Scores
Currently, Williams Companies, Inc. The has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Williams Companies, Inc. The has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Williams Companies, Inc. The (WMB) Up 8.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Williams Companies, Inc. The (WMB - Free Report) . Shares have added about 8.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Williams Companies, Inc. The due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Williams Q4 Earnings Beat Estimate, Increase Y/Y
Williams reported fourth-quarter 2021 adjusted earnings per share of 39 cents, beating the Zacks Consensus Estimate and surpassing the year-earlier period’s profit by 8 cents.
The outperformance could be tracked to higher-than-expected contributions from two major segments. Precisely, adjusted EBITDA from the Transmission & Gulf of Mexico and the Northeast G&P units totaled $685 million and $459 million, ahead of their respective Zacks Consensus Estimate of $643 million and $448 million.
Meanwhile, for the quarter ended Dec 31, the company’s revenues of $3.3 billion beat the Zacks Consensus Estimate of $2.8 billion and increased $1.2 billion from a year ago.
Key Takeaways
Adjusted EBITDA was $1.5 billion in the quarter under review, reflecting an increase of 11% from the corresponding period of 2020. Cash flow from operations totaled $1.1 billion, up 2.2% from the prior-year period. Favorable net working capital changes drove cash flow in the quarter.
Segmental Analysis
Transmission & Gulf of Mexico: Comprising Williams’ massive Transco pipeline system and Northwest Pipeline, the segment generated adjusted EBITDA of $685 million, rising 6.4% from the year-ago quarter. This unit’s performance was buoyed by service revenue gains from the expansion projects around Transco (the country's largest gas transmission system and Williams’ core initiative) being placed into service over the past few years. The positive factor was partially offset by an escalation in costs.
West: This segment includes gathering and processing assets in the Western region of the United States. It delivered adjusted EBITDA of $253 million, which is 8.7% lower than $277 million recorded in the year-earlier quarter. The deterioration in results were due to the absence of certain volume deficiency payments that was partly offset by rising volumes and rates.
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 $459 million, up 13.1% from the prior-year quarter’s $406 million. An uptick in gathering volumes and contribution from WMB’s increased ownership in Blue Racer Midstream drove the results.
Sequent: This is Williams’ newest unit following last year’s acquisition of wholesale gas trading enterprise Sequent Energy Management. The segment generated adjusted EBITDA of $169 million.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses increased 47.4% to $2.3 billion from $1.6 billion a year ago, primarily owing to spiraling product expenses.
Williams’ total capital expenditure was $371 million in the fourth quarter, down from $423 million a year ago. As of Dec 31, 2021, the company had cash and cash equivalents of $1.7 billion and a long-term debt of $21.7 billion with a debt-to-capitalization of 60.6%.
2022 Guidance
WMB guided full-year adjusted EBITDA in the band of $5.6-$6 billion with growth capital spending in the range of $1.25-$1.35 billion. Adjusted EPS for the year is expected in the range of $1.29 to $1.54. Further, Williams expects to grow its dividend at an annual rate of 4% and aims toward a dividend coverage ratio of 2.1x at the midpoint of its 2022 guidance.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 7.39% due to these changes.
VGM Scores
Currently, Williams Companies, Inc. The has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Williams Companies, Inc. The has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.