Yahoo Finance Williams (WMB) to Report Q1 Earnings: What's in Store?
The Williams Companies, Inc. WMB is set to release first-quarter results on May 3. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 46 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 March quarter. But it’s worth taking a look at Williams’ previous-quarter results first.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, the energy infrastructure provider beat the consensus mark on lower costs and higher contributions from its two segments — Transmission & Gulf of Mexico, and West. Williams had reported adjusted earnings per share of 53 cents, beating the Zacks Consensus Estimate of 47 cents. However, revenues of $2.9 billion generated by the firm came 7.8% below the consensus mark due to decreased product sales.
WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 11%, 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 first-quarter bottom line has been revised 2.2% upward in the past seven days. The estimated figure indicates a 12.2% improvement year over year. Meanwhile, the Zacks Consensus Estimate for revenues suggests a 12.7% increase from the year-ago period.
Factors to Consider
Williams’ 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 robust profits in the first quarter.
The unit is likely to have benefited from expansion projects around Transco, which was placed into service over the past few years, and additional volumes from its infrastructure on the back of strong drilling activity. The Zacks Consensus Estimate for the segment’s adjusted EBITDA is pegged at $724 million for the to-be-reported quarter, up from the prior-year level of $697 million.
The Northeast G&P unit — engaged in natural gas gathering and processing along with the NGL fractionation business in Marcellus and Utica shale regions — is also expected to have done well in the to-be-reported quarter. Echoing the segment’s healthy dynamics, the Zacks Consensus Estimate for the quarter’s adjusted EBITDA is projected at $450 million. The number suggests a $32 million increase from a profit of $418 million reported in the year-ago quarter.
On a somewhat bearish note, the increase in Williams’ costs might have dented the company’s to-be-reported bottom line. In particular, WMB’s operating and maintenance expenses in the fourth quarter were $472 million, some 18% higher than the prior-year period. The upward cost trajectory is likely to have continued in the first quarter due to the prevailing inflationary environment.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Williams Companies is likely to beat estimates in the first 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 -0.51%.
Zacks Rank: WMB 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:
Occidental Petroleum OXY has an Earnings ESP of +0.09% and a Zacks Rank #3. The firm is scheduled to release earnings on May 9.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Occidental Petroleum’s expected EPS growth rate for three to five years is currently 22%, which compares favorably with the industry's growth rate of 21.8%. Valued at around $55.3 billion, OXY has gained 4.9% in a year.
EOG Resources EOG has an Earnings ESP of +0.58% and a Zacks Rank #3. The firm is scheduled to release earnings on May 4.
EOG Resources’ expected EPS growth rate for three to five years is currently 28.6%, which compares favorably with the industry's growth rate of 25.8%. Valued at around $70.2 billion, EOG has gained 2% in a year.
ConocoPhillips COP has an Earnings ESP of +0.13% and a Zacks Rank #3. The firm is scheduled to release earnings on May 4.
ConocoPhillips beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 2.4%, on average. Valued at around $124.7 billion, COP has gained 6.9% in a year.
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Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
