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Factors Likely to Impact Williams Companies' (WMB) Q1 Earnings
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The Williams Companies, Inc. (WMB - Free Report) is set to release first-quarter 2020 results on Monday May 4, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s profit is 25 cents per share and for revenues is $2.08 billion. Against this backdrop, let’s consider the factors that are likely to impact the company’s March-quarter results.
Factors to Consider for Q1 Results
Williams’ ‘Atlantic-Gulf’ and ‘Northeast G&P’ segments, which collectively represents more than 70% of the company’s adjusted EBITDA, are likely to have performed well in the first quarter, a trend that most likely continued from the sequential quarter. The Atlantic-Gulf unit generated adjusted EBITDA of $570 million in the fourth quarter, up 7.8% while the company’s Northeast G&P business grew $73 million or 24%.
Courtesy of the expansion projects around Transco (the country's largest gas transmission system and Williams’ core project), which has been active over the past few years, and the additional volumes from its takeaway infrastructure generated by a record drilling activity, the company is likely to have been aided by consistently strong Atlantic-Gulf revenues in the first quarter.
Particularly, the completion of the Atlantic Sunrise project — the biggest in the history of Transco — is likely to have driven substantial incremental fee-based revenues as well as EBITDA growth.
Meanwhile, the Northeast G&P unit’s performance is expected to reflect on higher volumes, contributed by ramped-up natural gas production from Marcellus and Utica shales.
However, Williams’ extensive natural gas exposure raises its sensitivity to the commodity price. To be specific, lower gas prices in the first quarter are likely to have adversely impacted the volumes and distribution growth potential at Williams Partners, the company's largest income-generating business segment.
What Does Our Model Say?
Our proven Zacks model does not conclusively predict a beat for Williams this earnings season. 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: Williams has an Earnings ESP of -2.21%.
Zacks Rank: Williams has a Zacks Rank #3.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, this Tulsa, OK-based energy player reported fourth-quarter 2019 adjusted earnings per share (EPS) of 24 cents, missing the Zacks Consensus Estimate by a penny due to weak West segment’s performance.
However, the bottom line improved from the year-earlier quarter's adjusted earnings of 19 cents on strong contribution from this energy infrastructure provider’s Atlantic-Gulf and Northeast G&P units.
For the quarter ended Dec 31, the company’s revenues of $2.1 billion beat the Zacks Consensus Estimate by 2% but declined from $2.2 billion a year ago.
As far as earnings surprises are concerned, this midstream player shows a mixed record, having topped the Zacks Consensus Estimate twice in the last four quarterly reports, missing the same on other two occasions. The average positive surprise is 2.26%. This is depicted in the graph below:
Williams Companies, Inc. (The) Price and EPS Surprise
While an earnings beat looks uncertain for Williams, here are some firms worth considering from the energy space as our model shows that these have the right combination of elements to outpace estimates this reporting cycle:
Southwestern Energy Co. (SWN - Free Report) has an Earnings ESP of +3.90% and a Zacks Rank #2. The firm is scheduled to release earnings on Apr 30.
Laredo Petroleum, Inc. has an Earnings ESP of +2.50% and is Zacks #3 Ranked. The firm is scheduled to release earnings on May 6.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Factors Likely to Impact Williams Companies' (WMB) Q1 Earnings
The Williams Companies, Inc. (WMB - Free Report) is set to release first-quarter 2020 results on Monday May 4, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s profit is 25 cents per share and for revenues is $2.08 billion. Against this backdrop, let’s consider the factors that are likely to impact the company’s March-quarter results.
Factors to Consider for Q1 Results
Williams’ ‘Atlantic-Gulf’ and ‘Northeast G&P’ segments, which collectively represents more than 70% of the company’s adjusted EBITDA, are likely to have performed well in the first quarter, a trend that most likely continued from the sequential quarter. The Atlantic-Gulf unit generated adjusted EBITDA of $570 million in the fourth quarter, up 7.8% while the company’s Northeast G&P business grew $73 million or 24%.
Courtesy of the expansion projects around Transco (the country's largest gas transmission system and Williams’ core project), which has been active over the past few years, and the additional volumes from its takeaway infrastructure generated by a record drilling activity, the company is likely to have been aided by consistently strong Atlantic-Gulf revenues in the first quarter.
Particularly, the completion of the Atlantic Sunrise project — the biggest in the history of Transco — is likely to have driven substantial incremental fee-based revenues as well as EBITDA growth.
Meanwhile, the Northeast G&P unit’s performance is expected to reflect on higher volumes, contributed by ramped-up natural gas production from Marcellus and Utica shales.
However, Williams’ extensive natural gas exposure raises its sensitivity to the commodity price. To be specific, lower gas prices in the first quarter are likely to have adversely impacted the volumes and distribution growth potential at Williams Partners, the company's largest income-generating business segment.
What Does Our Model Say?
Our proven Zacks model does not conclusively predict a beat for Williams this earnings season. 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: Williams has an Earnings ESP of -2.21%.
Zacks Rank: Williams has a Zacks Rank #3.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, this Tulsa, OK-based energy player reported fourth-quarter 2019 adjusted earnings per share (EPS) of 24 cents, missing the Zacks Consensus Estimate by a penny due to weak West segment’s performance.
However, the bottom line improved from the year-earlier quarter's adjusted earnings of 19 cents on strong contribution from this energy infrastructure provider’s Atlantic-Gulf and Northeast G&P units.
For the quarter ended Dec 31, the company’s revenues of $2.1 billion beat the Zacks Consensus Estimate by 2% but declined from $2.2 billion a year ago.
As far as earnings surprises are concerned, this midstream player shows a mixed record, having topped the Zacks Consensus Estimate twice in the last four quarterly reports, missing the same on other two occasions. The average positive surprise is 2.26%. 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
Stocks to Consider
While an earnings beat looks uncertain for Williams, here are some firms worth considering from the energy space as our model shows that these have the right combination of elements to outpace estimates this reporting cycle:
Southwestern Energy Co. (SWN - Free Report) has an Earnings ESP of +3.90% and a Zacks Rank #2. The firm is scheduled to release earnings on Apr 30.
Comstock Resources, Inc. (CRK - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank of 2. The company is scheduled to release earnings on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.
Laredo Petroleum, Inc. has an Earnings ESP of +2.50% and is Zacks #3 Ranked. The firm is scheduled to release earnings on May 6.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>