Williams Cos. (WMB) Tops Q2 EPS by 1c

Williams Cos. (NYSE: WMB) reported Q2 EPS of $0.25, $0.01 better than the analyst estimate of $0.24. Revenue for the quarter came in at $1.78 billion versus the consensus estimate of $1.79 billion.

Strong 2Q 2020 results demonstrate stability and predictability of business; on track to meet 2020 guidance expectations

• Net income of $303 million, resulting in net income of $0.25 per diluted share (EPS)
• Adjusted EBITDA of $1.24 billion for the quarter and $2.502 billion year to date, up slightly for the year
• Excluding non-cash deferred revenue step down, 2Q 20 Adjusted EBITDA is up $31 million or 2.5%
• Cash flow from operations of $1.143 billion, up 7% over 2Q 19
• Debt-to-Adjusted EBITDA improved by 0.12x to 4.31x since 2Q 19
• Continuing to generate excess cash flow - DCF exceeds dividends and growth capital

CEO Perspective

Alan Armstrong, president and chief executive officer, made the following comments:

"We’ve built a business that is steady and predictable, and this quarter was a chance to show just how durable this business can be against a number of headwinds. Even with the significant and unexpected disruptions caused by geopolitical oil disputes, the COVID-19 pandemic and a tropical storm, our earnings remained consistent with our projections, largely due to the stability of our natural gas-focused business, our minimal exposure to commodity price volatility, and our proactive cost reductions instituted last year. We are pleased with our business performance to date and are confident in our ability to achieve 2020 guidance expectations and continued free cash flow.

“Williams’ employees continue to do their part to ensure the safe and reliable delivery of natural gas to America’s cities and communities, ensuring energy stability in these uncertain times. These efforts are frequently overlooked by the general public as we often take for granted the highly reliable and safe energy infrastructure that enables our everyday lives and jobs. I remain extremely proud of our employees for their steadfast efforts to keep our operations running smoothly while also going the extra mile to keep themselves and their coworkers healthy.

“Overall demand for natural gas has proved resilient, and we continue to successfully execute on a number of critical expansion projects along our Transco pipeline, in the Northeast G&P and in the Deepwater Gulf of Mexico. We remain bullish on natural gas demand growth because we recognize the critical role natural gas plays in a clean energy economy. Thanks to this clean energy resource, the U.S. continues to see significant reductions in CO2 emissions, lower consumer utility bills and enhanced opportunities for investment in renewable energy. Given Williams’ unrivaled portfolio of assets, there is perhaps no other natural gas company better positioned to meet the dual challenge of serving increasing U.S. demand for energy while advancing the transition to a low-carbon future with immediate, practical solutions that are available now."

2020 Financial Guidance

The company continues to expect 2020 Adjusted EBITDA toward the lower end of its previously stated range of between $4.95 billion and $5.25 billion. The company now expects 2020 growth capex of $1 billion to $1.2 billion, down from the original range of $1.1 billion to $1.3 billion. Also, the company now expects Distributable Cash Flow toward the midpoint of the original guidance range due primarily to lower maintenance capital expenditures as well as certain tax benefits expected in the second half of 2020.

For earnings history and earnings-related data on Williams Cos. (WMB) click here.

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