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Williams Companies (WMB): What to Expect in Q2 Earnings?
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Energy infrastructure provider Williams Companies Inc. (WMB - Free Report) is set to release second-quarter 2016 financial results after the closing bell on Aug 1.
The company delivered an average negative earnings surprise of 37.94% for the last four quarters. In the preceding three-month period, the company posted a negative earnings surprise of 70.00%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence This Quarter
Williams is a premier energy infrastructure provider in North America. The company boasts a widespread pipeline system and is one of the largest domestic natural gas transporters by volume. Hence, the company’s size and diversity are likely to drive earnings in the to-be-reported quarter.
The company’s midstream assets, which are less sensitive to commodity price fluctuations, help it maintain a steady stream of revenues and cash flows in spite of low natural gas prices.
Despite these positives, we remain concerned about the company’s high debt levels that make it vulnerable to an extended drop in commodity prices. The company’s exposure to commodity price volatility has also taken a toll on its volume and distribution growth potential.
Earnings Whispers
Our proven model does not conclusively show that Williams Companies is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -10.53% for Williams Companies. This is because the Most Accurate estimate is pegged at 17 cents while the Zacks Consensus Estimate stands at 19 cents.
Zacks Rank: Williams Companies has a Zacks Rank #3, which increases the predictive power of ESP. However, a negative ESP makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Though an earnings beat looks uncertain for Williams, here are some companies that you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +12.00 % and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Williams Companies (WMB): What to Expect in Q2 Earnings?
Energy infrastructure provider Williams Companies Inc. (WMB - Free Report) is set to release second-quarter 2016 financial results after the closing bell on Aug 1.
The company delivered an average negative earnings surprise of 37.94% for the last four quarters. In the preceding three-month period, the company posted a negative earnings surprise of 70.00%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence This Quarter
Williams is a premier energy infrastructure provider in North America. The company boasts a widespread pipeline system and is one of the largest domestic natural gas transporters by volume. Hence, the company’s size and diversity are likely to drive earnings in the to-be-reported quarter.
The company’s midstream assets, which are less sensitive to commodity price fluctuations, help it maintain a steady stream of revenues and cash flows in spite of low natural gas prices.
Despite these positives, we remain concerned about the company’s high debt levels that make it vulnerable to an extended drop in commodity prices. The company’s exposure to commodity price volatility has also taken a toll on its volume and distribution growth potential.
Earnings Whispers
Our proven model does not conclusively show that Williams Companies is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -10.53% for Williams Companies. This is because the Most Accurate estimate is pegged at 17 cents while the Zacks Consensus Estimate stands at 19 cents.
Zacks Rank: Williams Companies has a Zacks Rank #3, which increases the predictive power of ESP. However, a negative ESP makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
WILLIAMS COS Price and EPS Surprise
WILLIAMS COS Price and EPS Surprise | WILLIAMS COS Quote
Stocks to Consider
Though an earnings beat looks uncertain for Williams, here are some companies that you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +12.00 % and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>