Yahoo Finance Williams (WMB) Q1 Earnings Beat Estimates, Revenues Miss
The Williams Companies, Inc. WMB reported first-quarter 2024 adjusted earnings per share of 59 cents, which beat the Zacks Consensus Estimate of 49 cents. The bottom line also improved from the year-ago period’s level of 56 cents. The Transmission & Gulf of Mexico, West, and Northeast G&P segments delivered strong year-over-year results, leading to the outperformance.
Williams’ revenues of $2.8 billion missed the Zacks Consensus Estimate of $2.9 billion and decreased from the year-ago quarter’s reported figure of $3.1 billion. The underperformance was due to lower service revenues and net losses from commodity derivatives on a year-over-year basis.
Key Takeaways
Adjusted EBITDA totaled $1.9 billion in the quarter under review, up 7.7 % year over year. Cash flow from operations amounted to $1.2 billion, down 18.5 % from the corresponding quarter of 2023.
Segmental Analysis
Transmission & Gulf of Mexico: The segment reported an adjusted EBITDA of $839 million, up 15.2% from the year-ago quarter’s level. This was primarily fueled by positive net contributions from the acquisitions of Gulf Coast Storage and Mountain West, as well as the expansion project for Regional Energy Access.
West: This segment focuses on the gathering and processing of assets in the Western United States. Adjusted EBITDA for this segment totaled $328 million, up 14.7% from the prior-year quarter’s level of $286 million. This strong performance can be credited to the acquisitions in the DJ Basin and better commodity margins.
Northeast G&P: This segment registered an adjusted EBITDA of $504 million, up 3.9% from $485 million in the year-earlier quarter. This increase can be linked to elevated rates and volumes at the Susquehanna Supply Hub, increased rates at Cardinal, and a greater contribution from the Aux Sable investment.
Gas & NGL Marketing Services: This unit generated an adjusted EBITDA of $189 million, down from the prior-year quarter’s level of $231 million.
Costs, Capex & Balance Sheet
In the reported quarter, total costs and expenses of $1.8 billion increased almost 2.2% from the year-ago quarter’s figure of $1.7 billion.
Total capital expenditure was $544 million compared with $545 million a year ago. As of Mar 31, 2024, the company had cash and cash equivalents of $667 million, and a long-term debt of $24.1 billion, with a debt-to-capitalization of 65.9%.
Williams' Infrastructure Expansion
The Oklahoma-based energy infrastructure provider completed the acquisition of six storage facilities totaling 115 Bcf capacity across Louisiana and Mississippi during this reported quarter. These facilities are strategically positioned to cater to the increasing demands of LNG exports and power generation.
Additionally, Williams inaugurated Transco's Carolina Market Link, enhancing its operational capabilities during the same time.
Moreover, Williams received the Federal Energy Regulatory Commission (“FERC”) notice during the quarter to proceed with Transco's Commonwealth Energy Connect. It also commenced construction on Transco's Southside Reliability Enhancement and Southeast Energy Connector projects.
The initial phase of Transco's Regional Energy Access, managed by WMB, consistently generated earnings during the quarter, and the second phase is scheduled to commence operations in the fourth quarter.
Furthermore, the oil and gas storage and transportation company obtained a FERC certificate for Transco's Alabama-Georgia Connector and Texas to Louisiana Energy Pathway. The company also filed a FERC application for Transco's Southeast Supply Enhancement project, aimed at enhancing transmission capacity by approximately 1.6 Bcf/d. Additionally, Williams is actively executing various other transmission, gathering, processing and Deepwater Gulf of Mexico projects.
Guidance
The Zacks Rank #3 (Hold) company anticipates adjusted EBITDA in the range of $6.8 billion to $7.1 billion in the top half of 2024. Additionally, it anticipates growth capex between $1.45 billion and $1.75 billion and maintenance capex between $1.1 billion and $1.3 billion. This includes $350 million allocated for emission reduction and modernization initiatives.
The company expects a leverage ratio midpoint of 3.85x for 2024. WMB also expects to increase its dividend by 6.1% on an annualized basis to $1.90 per share in 2024, up from $1.79 in 2023.
Looking ahead to 2025, the company expects adjusted EBITDA between $7.2 billion and $7.6 billion, with growth capex in the band of $1.65-$1.95 billion and maintenance capex in the range of $750-$850 million. This includes $100 million for emission reduction and modernization initiatives.
Important Energy Earnings So Far
While we have discussed The Williams Companies, Inc.’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
EOG Resources, Inc. EOG, an American energy company engaged in hydrocarbon exploration, announced first-quarter 2024 adjusted earnings per share of $2.82, which beat the Zacks Consensus Estimate of $2.70. The bottom line also increased from the year-ago quarter’s level of $2.69. Strong quarterly results were primarily driven by higher total production volumes.
Total quarterly revenues of $6.1 billion beat the Zacks Consensus Estimate of $5.9 billion. The top line also improved from the prior-year quarter’s level of $6.04 billion. As of Mar 31, 2024, EOG had cash and cash equivalents worth $5.3 million and a long-term debt of $3.8 billion.
SLB SLB, the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments, and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy VLO reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure, however, was above our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure was also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
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