Why Williams Companies’ 3Q14 results are important

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Nov. 26 2019, Updated 9:43 p.m. ET

Williams Companies’ 3Q14 results

Williams Companies (WMB) released its 3Q14 earnings on October 29, 2014. In this part of the series, we’ll compare WMB’s performance during its quarter against analysts’ estimates. We’ll also discuss how the analysts expect WMB’s share will move in the next year.

Quarterly adjusted earnings per share

Between 3Q12 and 3Q14, WMB’s adjusted earnings per share (or EPS) decreased ~40%. It decreased ~21% from 3Q13 to 3Q14. In comparison, Kinder Morgan Inc.’s (KMI) adjusted EPS increased by 19% in the past year. Enterprise Products Partners (EPD) demonstrated a 16% growth in this period.

These companies, along with Spectra Energy (SE), operate in the midstream energy business. They’re part of the Energy Select Sector SPDR ETF (XLE).

Consensus vs Adjusted

As noted in the above graph, WMB’s adjusted EPS fell short of estimates in some of the past quarters. At times, the EPS exceeded the estimates. On average, reported EPS exceeded the consensus EPS by 14% in the past nine quarters. However, in 3Q14 the adjusted EPS fell short of consensus estimates.

The 3Q14 consensus sell side analysts’ adjusted EPS estimate for WMB is ~$0.33. It’s significantly higher than the $0.15 per share it recorded in 3Q14.

Broker recommendation

After the 3Q14 results were announced, WMB got Wall Street analysts to review the results. The analysts gave their recommendation and the target price.

Broker recommendation

The above chart shows that three analysts have rated the stock as “buy.” Two analysts assigned an “outperform” or “sector-perform” rating to the stock. It also shows that WMB has a consensus rating of “buy” and a one-year consensus mean price target of ~$67.

It should also be noted that the mean target price is 20% higher that the share price close as of October 20, 2014.

How did revenues and income in 3Q14 compare with the same quarter last year? Did a one-time item affect income in the latest quarter? We’ll discuss this in the next part of the series.

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