E Williams Companies: Strong Results, Forward Growth, Possible Opportunity

On Wednesday, February 19, 2020, midstream giant The Williams Companies, Inc. (WMB) announced its fourth quarter 2019 earnings results. At first glance, these results appeared to be mixed as the company managed to beat the expectations of its analysts in terms of top-line revenues but it did miss their expectations in terms of bottom-line earnings. A closer look at the actual earnings report meanwhile does show a slightly different different story, however, as the company delivered very impressive performance compared to the equivalent quarter of last year, which is largely what we have come to expect from midstream companies lately. Unfortunately though, the stock market has absolutely pummeled the company's stock price in response to the steep decline in oil prices that we have seen recently despite the fact that this company is somewhat insulated from energy prices. This may create an opportunity for investors.

As my long-time readers are no doubt well aware, it is my usual practice to share the highlights from a company's earnings report before delving into an analysis of its results. This is because these highlights provide a background for the remainder of the article as well as serve as a framework for the resultant analysis. Therefore, here are the highlights from Williams Companies' fourth quarter 2019 earnings results:

  • The Williams Companies reported total revenues of $2.107 billion in the fourth quarter of 2019. This represents a 4.40% decline over the $2.204 billion that the company brought in during the prior year quarter.
  • The company reported an operating income of $624 million in the most recent period. This compares very favorably to the $506 million that the firm had in the year-ago quarter.
  • The Williams Companies had a reserved transportation capacity of 21.3 billion cubic feet of natural gas per day at the end of the year. This was a record level for the company and represents an 8% increase over the prior year quarter.
  • The company gathered an average of 13.3 billion cubic feet of natural gas per day in the fourth quarter. This was also a record level for the company and represents a 10% increase over the equivalent period of last year.
  • The Williams Companies reported a net income of $124 million during the fourth quarter of 2019. This represents a substantial improvement over the $571 million net loss that the company reported in the fourth quarter of 2018.
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Bruce Powers 2 months ago Member's comment

$WMB looks good to me.