Williams (WMB) Earnings & Revenues Beat Estimates in Q3

The Williams Companies, Inc. WMB reported third-quarter 2022 adjusted earnings per share of 48 cents, beating the Zacks Consensus Estimate of 44 cents and surpassing the year-earlier period’s profit of 34 cents per share. The outperformance was due to higher-than-expected contributions from a couple of segments.

Adjusted EBITDA from the Others segment totaled $127 million, ahead of the Zacks Consensus Estimate of $117 million. Adjusted EBITDA of $337 million from the West unit beat the Zacks Consensus Estimate of $314 million.

Meanwhile, in the quarter ended Sep 30, Williams’ revenues of $3.02 billion outperformed the Zacks Consensus Estimate of $2.87 billion and also beat last year’s third-quarter revenues of $2.47 billion. The outperformance could be attributed to increased product sales.

Key Takeaways

Adjusted EBITDA was $1.64 billion in the quarter under review, reflecting an increase of 15.3% from the corresponding period of 2021. Cash flow from operations totaled $1.49 billion, up 78.7% from the prior-year period.

Williams Companies, Inc. The Price, Consensus and EPS Surprise

Williams Companies, Inc. The Price, Consensus and EPS Surprise

Williams Companies, Inc. The price-consensus-eps-surprise-chart | Williams Companies, Inc. The Quote

Segmental Analysis

Transmission & Gulf of Mexico: Comprising WMB’s massive Transco pipeline system and Northwest Pipeline, the segment generated adjusted EBITDA of $671 million, rising 6.5% from the year-ago quarter.

This unit’s performance was largely driven by higher service revenues from Transco’s Leidy South expansion project and reduced hurricane impacts on the Gulf Coast region.

West: This segment focuses on the gathering and processing of assets in the Western region of the United States. It delivered an adjusted EBITDA of $337 million, 31.1% higher than the $257 million recorded in the year-earlier quarter.

The improvement in results was primarily due to higher commodity-based rates and higher Haynesville gathering volumes, including contributions from Trace Midstream acquired in April.

Northeast G&P: The segment is engaged in natural gas gathering and processing, along with the NGL fractionation business in the Marcellus and Utica shale regions.

The unit generated adjusted EBITDA of $464 million, up almost 5% from the prior-year quarter’s $442 million. This uptick was driven by higher service revenues from Ohio Valley Midstream.

Gas & NGL Marketing Services: This unit generated adjusted EBITDA of $38 million, up 11.8% from the prior-year quarter’s $34 million.  The result of this segment benefited from stable commodity margins, which included the write-downs of inventory to lower period-end market prices.

Costs, Capex & Balance Sheet

In the reported quarter, total costs and expenses of $2.2 billion rose by almost 3.8% compared with the year-ago quarter’s figure of $2.12 billion.

Williams’ total capital investment was $950 million in the third quarter, up from $469 million a year ago. As of Sep 30, 2022, the company had cash and cash equivalents of $859 million and long-term debt of $22.5 billion, with a debt-to-capitalization of almost 61.8%.

2022 Guidance

WMB maintained its 2022 adjusted EBITDA in the range of $6.1 billion-$6.4 billion, with growth capital spending anticipated in the range of $1.25 billion-$1.35 billion. Further, Williams expects to achieve a leverage ratio midpoint of 3.6, lower than the original guidance of 3.8.

Moreover, the company reaffirmed its maintenance capital expenditures between $650 million and $750 million.

Zacks Rank

Williams currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Recent Releases

TotalEnergies SE TTE reported third-quarter 2022 operating earnings of $3.83 (€3.78) per share, lagging the Zacks Consensus Estimate of $3.91 per share by 2.04%.

The Zacks Consensus Estimate for TTE’s 2022 earnings implies year-over-year growth of 117.7%. TotalEnergies posted an average surprise of 10.9% in the last four reported quarters.

Devon Energy Corp. DVN reported third-quarter 2022 adjusted earnings of $2.18 per share, beating the Zacks Consensus Estimate of $2.13 by 2.4%. Earnings were up 101.9% from the year-ago quarter.

The Zacks Consensus Estimate for DVN’s 2022 earnings implies year-over-year growth of 150.7%. Devon Energy witnessed an average surprise of 8.5% in the last four reported quarters.

CNX Resources Corporation CNX reported a third-quarter 2022 adjusted loss of 54 cents per share, which missed the Zacks Consensus Estimate for earnings of 72 cents by 175%.

CNX Resources’ long-term (three to five years) earnings growth is currently pegged at 26.1%. The Zacks Consensus Estimate for CNX’s 2022 earnings implies year-over-year growth of 23.6%.

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