Williams Companies, Inc. WMB reported second-quarter 2018 adjusted earnings from continuing operations of 17 cents per share, marginally outpacing the Zacks Consensus Estimate of 16 cents. The better-than-expected results can be attributed to increase in service revenues and NGL margins. Further, the bottom line improved from the prior-year figure of 13 cents per share.
For the quarter ended Jun 30, 2018, Williams Companies reported revenues of $2,091 million, beating the Zacks Consensus Estimate of $2,000 million. Further, revenues also increased from the year-ago figure of $1,924 million.
Williams Companies, Inc. (The) Price, Consensus and EPS Surprise
Williams Companies, Inc. (The) Price, Consensus and EPS Surprise | Williams Companies, Inc. (The) Quote
Segmental Analysis
Williams Partners L.P.: This segment reported adjusted operating profit of $1,097 million, slightly lower than $1,104 million recorded in the year-ago quarter. Lower earnings at Discovery Producer Services and sale of the Geismar olefins facility impacted the results.
Other: The segment posted adjusted operating profit of $13 million, higher than the prior-year quarter’s $9 million.
Expenses Summary
Total cost and expenses increased 8.7% to $1,681 million in the reported quarter compared with $1,546 million in the prior-year quarter. The increased costs were primarily driven by higher product costs, impairment charges and processing commodity expenses.
Capital Expenditure & Balance Sheet
During the reported quarter, Williams Companies’ capital expenditure was $933 million. As of Jun 30, 2018, the company had cash and cash equivalents of $275 million. Long-term debt of the company was $21,313 million, representing a debt-to-capitalization ratio of 69.5%.
Outlook
The company has updated its guidance for 2018 and 2019. Williams Companies now expects its adjusted EBITDA for 2018 within $4,450-$4,650 million. The company expects distributable cash flow in the range of $2,600-$2,900 million. The coverage ratio is expected between 1.52x and 1.70x in 2018. The growth capex is now anticipated at $3.9 billion versus prior guidance of $2.6 billion.
For 2019, Williams Companies anticipates its adjusted EBITDA in the band of $4,850-$5,150 million, with distributable cash flow within $2,900-$3.300 million. The coverage ratio is expected to be around 1.68x. Growth capex for 2019 is expected at $2.6 billion versus prior guidance of $2.4 billion.
Zacks Rank and Key Picks
Williams Companies currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are China Petroleum and Chemical Corporation SNP, also known as Sinopec, PetroChina Company Limited PTR, and Bonanza Creek Energy, Inc. BCEI, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sinopec delivered an average positive earnings surprise of 492.8% in the trailing four quarters.
PetroChina delivered an average positive earnings surprise of 21.99% in the trailing four quarters.
Bonanza Creek surpassed earnings estimates in each of the trailing four quarters, with an average positive earnings surprise of 215.16%
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