Williams Cos. (NYSE: WMB) reported Q1 EPS of $0.26, in-line with the analyst estimate of $0.26. Revenue for the quarter came in at $1.91 billion versus the consensus estimate of $2.13 billion.

Strong Fee-Revenue Drives 1Q 2020 Results

• Net loss of $518 million, resulting in net loss of $0.43 per diluted share (EPS), which includes net non-cash impairment impact of $824 million, or $0.68 per diluted share, with improved business performance being offset by non-cash impairments
• EPS of $0.26 per diluted share, excluding primarily non-cash impairment charges
• 10% increase in DCF to $861 million
• 4% increase in Adjusted EBITDA to $1.26 billion
• 2% increase in cash flow from operations to $787 million
• 1.78x dividend coverage ratio up from 1Q 19
• Debt-to-Adjusted EBITDA reduced by 0.41x to 4.36x since 1Q 19
• 45% reduction in capital investments; down $233 million vs. 1Q 19

CEO Perspective

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

“First quarter results were in line with our expectations as strong fee-revenue and cost savings more than offset much lower commodity margins. We are pleased with the resilient cash flow our business produces, including continued growth from our Transmission & Gulf of Mexico segment as well as the Northeast G&P segment - even with the onset of the historic disruption in energy markets due to geopolitical factors and the wide-spread economic impacts of COVID-19. As a critical natural gas infrastructure provider, I am proud of the efforts of our frontline employees who have worked diligently behind the scenes to ensure we continue to safely and reliably meet the clean energy needs of communities across the country.

“Now more than ever, our focus on connecting the best natural gas supplies to the best markets is proving to be the right strategy. The scale of our natural gas-focused operations provides us the opportunity to identify efficiencies and reduce costs, something we actively addressed in 2019 and continue to explore this year. A healthy 42% of our EBITDA is driven by the firm reserved capacity payments on our fully contracted natural gas transmission pipelines that serve electric power generation, industrial and residential sectors. Our gas gathering and processing operations in advantaged gas-directed supply areas stand to benefit as associated gas basins are impacted by falling oil prices. Despite the fact that we could see some near-term shut-in risks in oil-directed areas, our business remains stable, and we continue to execute on our portfolio of transmission growth projects.”

Armstrong added, “Demand for natural gas remains firm, and we are extremely well-positioned to deliver this clean, affordable and reliable energy source to communities across the United States at a time when the dependability of the nation’s energy infrastructure is of critical importance. Natural gas is an economically and environmentally superior energy source with dramatically less exposure to geopolitical factors. Not surprisingly, Williams is standing tall amid the downward pressure in the oil market and demonstrating during these volatile times the stability of our natural gas-focused business strategy.”

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