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Is Williams Companies (WMB) Poised for a Beat in Q2 Earnings?

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Energy infrastructure provider The Williams Companies, Inc. (WMB - Free Report) is set to release second-quarter 2017 results after the closing bell on Aug 2.

In the preceding three-month period, the Tulsa, OK-based company delivered a negative earnings surprise of 30.00% owing to escalating costs. Coming to earnings surprise history, the company posted a positive average earnings surprise of 0.31% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

Williams Companies, Inc. (The) Price and EPS Surprise


What the Zacks Model Unveils?

Our proven model shows that Williams Companies is likely to beat estimates this quarter because it has the right combination of two key ingredients.

Zacks ESP: The Earnings ESP for Williams Companies is +50.00% because the Most Accurate Estimate of 27 cents is pegged higher than the Zacks Consensus Estimate of 18 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Williams Companies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Note that stocks with a Zacks Rank #1, 2(Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

Factors at Play

Both the Marcellus and Utica regions continue to experience strong production growth due to increased drilling efficiency in the regions. The average natural gas production in the Marcellus region was up by 7.4% in second-quarter 2017 from the prior-year quarter. Further, the Utica region also witnessed year-over-year growth of 17.2% in natural gas production. This development bodes well for the company and is expected to drive revenues.

The pricing scenario for natural gas has improved from the year-ago quarter. This is a favorable development for Williams Companies as we expect the company to be able to sell the increased output at higher prices. This, in turn, is expected to boost the company’s second-quarter results.

The company’s midstream MLP William Partners LP (WPZ - Free Report) , from which Williams Companies derives most of its revenues, is expected to benefit from expansion projects. Increased growth prospects across North America is expected to unlock attractive opportunities for production /pipeline firms like Williams Companies, Kinder Morgan, Inc. (KMI - Free Report) , TransCanada Corporation (TRP - Free Report) among others.  

Shares of Williams Companies have outperformed the industry in the second quarter. During the aforesaid period, shares of the company rose by 2.3% against a 4% decline of the broader industry.

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