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Can Williams (WMB) Maintain Its Earnings Beat Streak in Q2?
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The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter results on Aug 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 39 cents per share on revenues of $2.8 billion.
Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance in the June quarter. But it’s worth taking a look at Williams’ previous-quarter results first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, the energy infrastructure provider beat the consensus mark on a higher-than-expected contribution from the Northeast G&P unit. Williams had reported adjusted earnings per share of 56 cents, beating the Zacks Consensus Estimate of 46 cents. Revenues of $3.1 billion generated by the firm also came 8.3% above the consensus mark.
WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 12.9%, on average. This is depicted in the graph below:
Williams Companies, Inc. (The) Price and EPS Surprise
The Zacks Consensus Estimate for the second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 2.5% fall year over year. However, the Zacks Consensus Estimate for revenues suggests an 11.3% increase from the year-ago period.
Factors to Consider
Williams’ West unit — comprising interstate natural gas pipeline and other gathering and processing assets in the Western region of the United States — is expected to have done well in the to-be-reported quarter. Echoing the segment’s healthy dynamics and benefits associated with the acquisition of Trace Midstream’s Haynesville gathering and processing assets, our estimate for the quarter’s adjusted EBITDA is pegged at $303.3 million. The number suggests a 2.5% increase from a profit of $296 million reported in the year-ago quarter.
On a further positive note, the decrease in Williams’ costs might have buoyed its to-be-reported bottom line. In particular, our estimate for product cost is pegged at $786.2 million, indicating an 8.3% drop from $857 million reported in the year-ago quarter. Our model also predicts the company’s total expenses to fall 3.9% year over year to $1.9 billion. This downward trajectory could be attributed to WMB’s successful cost-control initiatives.
However, as a counter to these factors, lower earnings from two key segments are likely to have hurt Williams’ results due to tepid commodity prices and seasonal effects. Going by our model, WMB’s 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 adjusted EBITDA of $636.5 million, down 2.4% from the year-earlier level.
Additionally, our adjusted EBITDA projection for the Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — reflects a 1.7% year-over-year drop.
What Does Our Model Say?
The proven Zacks model does not conclusively show that The Williams Companies is likely to beat estimates in the second quarter. 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 -0.85%.
Zacks Rank: The Williams Companies currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for WMB, here are some firms from the energy space that you may want to consider on the basis of our model:
MPLX LP (MPLX - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
MPLX has a trailing four-quarter earnings surprise of 5.9%, on average. Over the past 60 days, the partnership saw the Zacks Consensus Estimate for 2023 move up 2%. Valued at around $35.5 billion, the partnership has gained 11.3% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 2.
Murphy USA has a trailing four-quarter earnings surprise of 15.6%, on average. Over the past 60 days, MUSA saw the Zacks Consensus Estimate for 2023 move up 7.5%. Valued at around $6.9 billion, the company has gained 15.5% in a year.
Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +1.48% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 3.
Pembina Pipeline beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 30.7%, on average. Valued at around $17.4 billion, PBA has lost 15.3% in a year.
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Can Williams (WMB) Maintain Its Earnings Beat Streak in Q2?
The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter results on Aug 2. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 39 cents per share on revenues of $2.8 billion.
Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance in the June quarter. But it’s worth taking a look at Williams’ previous-quarter results first.
Highlights of Q1 Earnings & Surprise History
In the last reported quarter, the energy infrastructure provider beat the consensus mark on a higher-than-expected contribution from the Northeast G&P unit. Williams had reported adjusted earnings per share of 56 cents, beating the Zacks Consensus Estimate of 46 cents. Revenues of $3.1 billion generated by the firm also came 8.3% above the consensus mark.
WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 12.9%, on average. 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 second-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 2.5% fall year over year. However, the Zacks Consensus Estimate for revenues suggests an 11.3% increase from the year-ago period.
Factors to Consider
Williams’ West unit — comprising interstate natural gas pipeline and other gathering and processing assets in the Western region of the United States — is expected to have done well in the to-be-reported quarter. Echoing the segment’s healthy dynamics and benefits associated with the acquisition of Trace Midstream’s Haynesville gathering and processing assets, our estimate for the quarter’s adjusted EBITDA is pegged at $303.3 million. The number suggests a 2.5% increase from a profit of $296 million reported in the year-ago quarter.
On a further positive note, the decrease in Williams’ costs might have buoyed its to-be-reported bottom line. In particular, our estimate for product cost is pegged at $786.2 million, indicating an 8.3% drop from $857 million reported in the year-ago quarter. Our model also predicts the company’s total expenses to fall 3.9% year over year to $1.9 billion. This downward trajectory could be attributed to WMB’s successful cost-control initiatives.
However, as a counter to these factors, lower earnings from two key segments are likely to have hurt Williams’ results due to tepid commodity prices and seasonal effects. Going by our model, WMB’s 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 adjusted EBITDA of $636.5 million, down 2.4% from the year-earlier level.
Additionally, our adjusted EBITDA projection for the Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — reflects a 1.7% year-over-year drop.
What Does Our Model Say?
The proven Zacks model does not conclusively show that The Williams Companies is likely to beat estimates in the second quarter. 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 -0.85%.
Zacks Rank: The Williams Companies currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for WMB, here are some firms from the energy space that you may want to consider on the basis of our model:
MPLX LP (MPLX - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 1.
You can see the complete list of today’s Zacks #1 Rank stocks here.
MPLX has a trailing four-quarter earnings surprise of 5.9%, on average. Over the past 60 days, the partnership saw the Zacks Consensus Estimate for 2023 move up 2%. Valued at around $35.5 billion, the partnership has gained 11.3% in a year.
Murphy USA (MUSA - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 2.
Murphy USA has a trailing four-quarter earnings surprise of 15.6%, on average. Over the past 60 days, MUSA saw the Zacks Consensus Estimate for 2023 move up 7.5%. Valued at around $6.9 billion, the company has gained 15.5% in a year.
Pembina Pipeline Corporation (PBA - Free Report) has an Earnings ESP of +1.48% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 3.
Pembina Pipeline beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of 30.7%, on average. Valued at around $17.4 billion, PBA has lost 15.3% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.