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Williams (WMB) Q3 Earnings Beat Estimates, Revenues Miss
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The Williams Companies, Inc. (WMB - Free Report) reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The bottom line declined from the year-ago period’s reported figure of 48 cents due to lower-than-expected contributions from two major segments — West and Gas, and NGL Marketing Services.
Williams’ revenues of $2.56 billion missed the Zacks Consensus Estimate of $2.57 billion due to lower product sales. The top line also decreased from the year-ago quarter’s reported figure of $3.02 billion.
Williams Companies, Inc. (The) Price, Consensus and EPS Surprise
Adjusted EBITDA totaled $1.65 billion in the quarter under review, up 0.9% year over year. The figure also beat our estimate of $1.51 billion. Cash flow from operations amounted to $1.23 billion, down 17.4% from that recorded in the corresponding quarter of 2022.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $754 billion, up 12.4% from the year-ago quarter’s level. This was largely driven by higher service revenues. The reported figure also outpaced our prediction of $513.5 million.
West: This segment registered an adjusted EBITDA of $315 million, down 16.4% from $377 million recorded in the year-earlier quarter. The figure, however, beat our estimate of $229 million. This underperformance can be attributed to lower NYMEX-based rates in the Barnett.
Northeast G&P: Adjusted EBITDA for this segment totaled $485 million, up 4.5% from the prior-year quarter’s level of $464 million. The figure also beat our estimate of $430.5 million. This uptick in performance can be attributed to increased gathering rates and higher volumes.
Gas & NGL Marketing Services: This unit generated an adjusted EBITDA profit of $16 million, down from the prior-year quarter’s level of $38 million. The reported figure missed our projection of $274.1 million.
Costs, Capex & Balance Sheet
Total costs and expenses were $1.57 billion in the reported quarter.
Total capital expenditure was $690 million compared with $841 million a year ago. As of Sep 30, 2023, the company had cash and cash equivalents of $2.1 billion, and a long-term debt of $22.8 billion, with a debt-to-capitalization of 61.4%.
Guidance
WMB expects full-year adjusted EBITDA to be in the range of $6.6-$6.8 billion. Growth capital spending is anticipated to be in the band of $1.6-$1.9 billion. Williams expects to achieve a leverage ratio mid-point of 3.65. The guidance for 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
Liberty Energy is valued at $3.41 billion. LBRT currently pays a dividend of 20 cents per share, or 0.99% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
CVR Energy is valued at $3.28 billion. In the past year, its shares have lost 19%.
CVI currently pays a dividend of $2 per share or 6.13% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Delek US Holdings is worth approximately $1.69 billion. DK currently pays a dividend of 94 cents per share, or 3.61% on an annual basis.
The company operates in the integrated downstream energy business in the United States. It operates under three segments — refining, logistics and retail.
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Williams (WMB) Q3 Earnings Beat Estimates, Revenues Miss
The Williams Companies, Inc. (WMB - Free Report) reported third-quarter 2023 adjusted earnings of 45 cents per share, which beat the Zacks Consensus Estimate of 40 cents. The bottom line declined from the year-ago period’s reported figure of 48 cents due to lower-than-expected contributions from two major segments — West and Gas, and NGL Marketing Services.
Williams’ revenues of $2.56 billion missed the Zacks Consensus Estimate of $2.57 billion due to lower product sales. The top line also decreased from the year-ago quarter’s reported figure of $3.02 billion.
Williams Companies, Inc. (The) Price, Consensus and EPS Surprise
Williams Companies, Inc. (The) price-consensus-eps-surprise-chart | Williams Companies, Inc. (The) Quote
Key Takeaways
Adjusted EBITDA totaled $1.65 billion in the quarter under review, up 0.9% year over year. The figure also beat our estimate of $1.51 billion. Cash flow from operations amounted to $1.23 billion, down 17.4% from that recorded in the corresponding quarter of 2022.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $754 billion, up 12.4% from the year-ago quarter’s level. This was largely driven by higher service revenues. The reported figure also outpaced our prediction of $513.5 million.
West: This segment registered an adjusted EBITDA of $315 million, down 16.4% from $377 million recorded in the year-earlier quarter. The figure, however, beat our estimate of $229 million. This underperformance can be attributed to lower NYMEX-based rates in the Barnett.
Northeast G&P: Adjusted EBITDA for this segment totaled $485 million, up 4.5% from the prior-year quarter’s level of $464 million. The figure also beat our estimate of $430.5 million. This uptick in performance can be attributed to increased gathering rates and higher volumes.
Gas & NGL Marketing Services: This unit generated an adjusted EBITDA profit of $16 million, down from the prior-year quarter’s level of $38 million. The reported figure missed our projection of $274.1 million.
Costs, Capex & Balance Sheet
Total costs and expenses were $1.57 billion in the reported quarter.
Total capital expenditure was $690 million compared with $841 million a year ago. As of Sep 30, 2023, the company had cash and cash equivalents of $2.1 billion, and a long-term debt of $22.8 billion, with a debt-to-capitalization of 61.4%.
Guidance
WMB expects full-year adjusted EBITDA to be in the range of $6.6-$6.8 billion. Growth capital spending is anticipated to be in the band of $1.6-$1.9 billion. Williams expects to achieve a leverage ratio mid-point of 3.65. The guidance for 2023 dividend increased 5.3% on an annualized basis to $1.79 per share from $1.70 in 2022.
Zacks Rank and Other Key Picks
Currently, WMB carries a Zacks Rank #2 (Buy).
Investors interested in the energy sector might look at some other top-ranked stocks like Liberty Energy Inc. (LBRT - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and CVR Energy, Inc. (CVI - Free Report) and Delek US Holdings, Inc. (DK - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Energy is valued at $3.41 billion. LBRT currently pays a dividend of 20 cents per share, or 0.99% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
CVR Energy is valued at $3.28 billion. In the past year, its shares have lost 19%.
CVI currently pays a dividend of $2 per share or 6.13% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Delek US Holdings is worth approximately $1.69 billion. DK currently pays a dividend of 94 cents per share, or 3.61% on an annual basis.
The company operates in the integrated downstream energy business in the United States. It operates under three segments — refining, logistics and retail.