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Is Williams (WMB) Poised for Another Earnings Beat This Q1?

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The Williams Companies, Inc. (WMB - Free Report) is set to release first-quarter results after the closing bell on May 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 35 cents per share on revenues of $3.2 billion.

Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance in the March quarter. But it’s worth taking a look at Williams’ previous-quarter performance first.

Highlights of Q4 Earnings & Surprise History

In the last-reported quarter, the energy infrastructure provider beat the consensus mark on higher-than-expected contributions from two major segments — Transmission & Gulf of Mexico and the Northeast G&P. Williams had reported adjusted earnings per share of 39 cents, beating the Zacks Consensus Estimate by 8 cents. Revenues of $3.3 billion generated by the firm also came in above the Zacks Consensus Estimate of $2.8 billion.

Williams beat the Zacks Consensus Estimate in three of the last four quarters and met in the others, which resulted in an earnings surprise of 18.1%, on average. This is depicted in the graph below:
 

Williams Companies, Inc. The Price and EPS Surprise

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 first-quarter bottom line has been revised 6.1% upward in the last seven days. The estimated figure indicates no change year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 22.4% 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 have generated robust profits in the fourth quarter. The unit is likely to have benefited 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 $644 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 — is also expected to have done well in the to-be-reported quarter. Echoing the segment’s healthy dynamics, the Zacks Consensus Estimate for the quarter’s adjusted EBITDA is projected at $437 million. The number suggests an 8.7% increase from the profit of $402 million reported in the year-ago quarter.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for Williams this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Williams has an Earnings ESP of +1.68% and a Zacks Rank #1.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Williams is not the only energy company looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Devon Energy Corporation (DVN - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank #1. The firm is scheduled to release earnings on May 2.

For 2022, DVN has a projected earnings growth rate of 130.3%. Valued at around $37.1 billion, Devon Energy has surged around 150.6% in a year.

Murphy USA (MUSA - Free Report) has an Earnings ESP of +18.49% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 3.

MUSA is valued at around $5.9 billion. The company topped the Zacks Consensus Estimate by an average of 24.6% in the trailing four quarters. Murphy USA has gained around 65% in a year.

APA Corporation (APA - Free Report) has an Earnings ESP of +3.60% and a Zacks Rank #2. The firm is scheduled to release earnings on May 4.

The Zacks Consensus Estimate for APA’s 2022 earnings has been revised 54.5% upward over the past 60 days. The company topped the Zacks Consensus Estimate by an average of 13.4% in the trailing four quarters. APA has gained around 90.5% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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