Expect higher revenues
Williams Companies (WMB) is scheduled to release its first-quarter earnings on May 1 after the market closes. According to analysts’ estimates, Williams Companies will report revenues of $2.26 billion for the quarter ending March 31. In the same quarter last year, the company reported revenues of $2.09 billion, which indicates revenue growth of ~8% YoY (year-over-year).
So far, Williams Companies stock has risen more than 30% this year. We’ll have to see if the company’s upcoming earnings add fresh upside to the stock.
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During the first quarter, Henry Hub natural gas spot prices largely trended lower and fell from $3.25 per MMBtu (million British thermal units) to $2.75 per MMBtu. Natural gas prices were almost 5% lower in the first quarter compared to the same period in 2018.
Williams Companies brought the Atlantic Sunrise project in service in the fourth quarter last year, which boosted its revenues in the last quarter. The pipeline carries natural gas from Pennsylvania to South Carolina. The consolidated fee-based revenues will likely increase by $25 million–$30 million per month.
On April 10, Williams Companies announced that it sold 50% interest in Jackalope Gas Gathering Services to Crestwood Equity Partners (CEQP) for $485 million. Before the transaction, there was a 50% joint venture between Crestwood and Williams. Williams was the operator and Crestwood was a marketer. After the transaction, Crestwood became the operator. Williams Companies plans to use the proceeds from the transaction for debt reduction and to fund its growth projects.
Williams Companies’ (WMB) flattish leverage trend suggests that its earnings have grown mainly in proportion with its debt.
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