Williams Companies (WMB) Q1 Earnings: What To Expect?
Zacks Investment Research | May 02, 2016 10:40PM ET
Energy infrastructure provider Williams Companies Inc. (NYSE:WMB) is set to release first-quarter 2016 financial results after the closing bell on May 4, 2016.
The company reported an average negative earnings surprise of 18.8% for the last four quarters. In the preceding three-month period, the company posted a negative earnings surprise of 94.44%. Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Williams is a premier energy infrastructure provider in North America. The company boasts a widespread pipeline system and is one of the largest domestic natural gas transporters by volume. Hence, the company’s size and diversity are likely to drive earnings in the soon-to-be-reported quarter.
The company’s midstream assets, which are less sensitive to commodity price fluctuations, help it maintain a steady stream of revenues and cash flows in spite of low natural gas prices.
Despite these positives, we remain concerned about the company’s high debt levels that make it vulnerable to an extended drop in commodity prices. The company’s exposure to the commodity price volatility has also taken a toll on its volume and distribution growth potential.
Moreover, the company’s keep-whole and percentage-of-liquids basis contracts for its midstream assets have exposed it to commodity price risk. If these contracts become less profitable, cash flow from Williams’ midstream business could be adversely affected, thereby leading to underperformance.
Earnings Whispers
Our proven model does not conclusively show that Williams Companies is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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