North American energy firm, Williams Companies Inc. (NYSE:WMB) reported weak first-quarter 2016 results owing to a decline in the natural gas liquids (NGL) margin. Following the announcement, the company fell nearly 3% in after trading hours on the NYSE.
The company reported adjusted earnings from continuing operations of 3 cents per share, widely missing the Zacks Consensus Estimate of 10 cents. The bottom line also came in lower than the prior-year figure of 16 cents.
For the quarter ended Mar 31, Williams Companies reported revenues of $1,660 million, again missing the Zacks Consensus Estimate of $2,060 million and declining from the year-ago quarter revenues of $1,716 million.
Segmental Analysis
Williams Partners: This segment reported adjusted operating profit of $1,060 million in the quarter, up 16% from $917 million in the year-ago quarter. Increased fee-based revenues and improved olefins margins from Geismar plant production drove the results. A partial dampener came in the form of a decrease in NGL margin.
Williams NGL & Petchem Services: The unit incurred adjusted operating loss of $14 million, wider than the year-ago quarter loss of $5 million. Significant rise in total segment cost and expenses led to the underperformance.
Other: The segment posted adjusted operating profit of $10 million, up from the year-ago quarter profit of $6 million.
Operating and Maintenance Expenses
Operating and maintenance expenses were recorded at $391 million, slightly higher than $387 million in the first quarter of 2015.
Capital Expenditure & Balance Sheet
During the reported quarter, Williams Companies’ capital expenditure came in at $513 million. As of Mar 31, 2016, the company had long-term debt of $23,701 million, representing a debt-to-capitalization ratio of 81.3%. Williams Companies has a cash balance of about $164 million.
Zacks Rank & Other Picks
Williams Companies currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players in the energy sector include PetroChina Co. Ltd. (NYSE:PTR) , Seadrill Partners LLC (NYSE:SDLP) and Braskem S.A. (NYSE:BAK) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
PETROCHINA ADR (PTR): Free Stock Analysis Report
BRASKEM SA (BAK): Free Stock Analysis Report
WILLIAMS COS (WMB): Free Stock Analysis Report
SEADRILL PTNRS (SDLP): Free Stock Analysis Report
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