It has been about a month since the last earnings report for Williams Companies, Inc. The (WMB Quick QuoteWMB - Free Report) . Shares have added about 4.4% 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 Q2 Earnings Beat Estimate

The Williams Companies reported second-quarter 2022 adjusted earnings per share of 40 cents, beating the Zacks Consensus Estimate of 37 cents and surpassing the year-earlier period’s profit of 27 cents per share.

The outperformance was due to higher-than-expected contributions from a couple of segments. Adjusted EBITDA from the Others segment totaled $92 million, ahead of the Zacks Consensus Estimate of $81 million. Adjusted EBITDA increased year over year by 28.1% in the West unit.

Meanwhile, in the quarter ended Jun 30, Williams’ revenues of $2.49 billion missed the Zacks Consensus Estimate of $3 billion but outperformed the last year’s second-quarter revenues of $2.28 billion, which could be attributed to increased product sales.

Segmental Analysis

Transmission & Gulf of Mexico: Comprising WMB’s massive Transco pipeline system and Northwest Pipeline, the segment generated adjusted EBITDA of $652 million, rising only 0.6% from the year-ago quarter. This unit’s performance was largely driven by higher service revenues, primarily at Transco, largely from the Leidy South expansion project.

West: This segment includes the gathering and processing assets in the Western region of the United States. It delivered adjusted EBITDA of $296 million, 32.7% higher than the $223 million recorded in the year-earlier quarter. The improvement in results was primarily due to the Trace Midstream acquisition, which closed on Apr 29, as well as higher commodity-based rates and higher Haynesville gathering volumes.

Northeast G&P: Engaged in natural gas gathering and processing, along with the NGL fractionation business in the Marcellus and Utica shale regions, the segment generated adjusted EBITDA of $450 million, up almost 10% from the prior-year quarter’s $409 million. This uptick was driven by top-line Gathering and Processing revenue growth on slightly higher volumes. The G&P rate growth was supported by a combination of factors, including higher commodity-based rates, annual fee escalations and other expansion-related fee increases.

Gas & NGL Marketing Services: This unit generated adjusted EBITDA of $6 million, down 25% from the prior-year quarter’s $8 million.  The result of this segment was impacted by higher commodity margins, more than offset by the absence of a favorable impact in 2021 from Winter Storm Uri and higher administrative costs associated with the Sequent business acquired in July 2021.

Costs, Capex & Balance Sheet

In the reported quarter, total costs and expenses of $2.01 billion rose by almost 20% compared with the year-ago quarter’s figure of $1.68 billion.

Williams’ total capital expenditure was $1.36 billion in the second quarter, up from $460 million a year ago. As of Jun 30, 2022, the company had cash and cash equivalents of $133 million and a long-term debt of $20.8 billion, with a debt-to-capitalization of almost 65%.

2022 Guidance

WMB raised its full-year adjusted EBITDA guidance and now expects 2022 adjusted EBITDA in the range of $6.1 billion-$6.4 billion, a $450-million midpoint increase from the earlier guidance range of $5.9-$6.2 billion, with growth capital spending still anticipated in the range of $2.25 billion-$2.35 billion. Further, Williams expects to achieve a leverage ratio midpoint of 3.6X, lower than the original guidance of 3.8X.

The company maintained its maintenance capital expenditure guidance between $650 million and $750 million, including the capital for emissions reduction and modernization initiatives.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Williams Companies, Inc. The has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. Notably, Williams Companies, Inc. The has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Williams Companies, Inc. The is part of the Zacks Oil and Gas - Production and Pipelines industry. Over the past month, Kinder Morgan (KMI Quick QuoteKMI - Free Report) , a stock from the same industry, has gained 3.7%. The company reported its results for the quarter ended June 2022 more than a month ago.

Kinder Morgan reported revenues of $5.15 billion in the last reported quarter, representing a year-over-year change of +63.5%. EPS of $0.27 for the same period compares with $0.23 a year ago.

For the current quarter, Kinder Morgan is expected to post earnings of $0.29 per share, indicating a change of +31.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Kinder Morgan. Also, the stock has a VGM Score of C.