Why Is Williams Companies, Inc. The (WMB) Up 2.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Williams Companies, Inc. The (WMB). Shares have added about 2.6% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is Williams Companies, Inc. The due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Williams Q3 Earnings Beat Estimate

The Williams Companies reported third-quarter 2022 adjusted earnings per share of 48 cents, beating the Zacks Consensus Estimate of 44 cents and surpassing the year-earlier period’s profit of 34 cents per share. The outperformance was due to higher-than-expected contributions from a couple of segments.

Adjusted EBITDA from the Others segment totaled $127 million, ahead of the Zacks Consensus Estimate of $117 million. Adjusted EBITDA of $337 million from the West unit beat the Zacks Consensus Estimate of $314 million.

Meanwhile, in the quarter ended Sep 30, Williams’ revenues of $3.02 billion outperformed the Zacks Consensus Estimate of $2.87 billion and also beat last year’s third-quarter revenues of $2.47 billion. The outperformance could be attributed to increased product sales.

Adjusted EBITDA was $1.64 billion in the quarter under review, reflecting an increase of 15.3% from the corresponding period of 2021. Cash flow from operations totaled $1.49 billion, up 78.7% from the prior-year period.

Segmental Analysis

Transmission & Gulf of Mexico: Comprising WMB’s massive Transco pipeline system and Northwest Pipeline, the segment generated adjusted EBITDA of $671 million, rising 6.5% from the year-ago quarter.

This unit’s performance was largely driven by higher service revenues from Transco’s Leidy South expansion project and reduced hurricane impacts on the Gulf Coast region.

West: This segment focuses on the gathering and processing of assets in the Western region of the United States. It delivered an adjusted EBITDA of $337 million, 31.1% higher than the $257 million recorded in the year-earlier quarter.

The improvement in results was primarily due to higher commodity-based rates and higher Haynesville gathering volumes, including contributions from Trace Midstream acquired in April.

Northeast G&P: The segment is engaged in natural gas gathering and processing, along with the NGL fractionation business in the Marcellus and Utica shale regions.

The unit generated adjusted EBITDA of $464 million, up almost 5% from the prior-year quarter’s $442 million. This uptick was driven by higher service revenues from Ohio Valley Midstream.

Gas & NGL Marketing Services: This unit generated adjusted EBITDA of $38 million, up 11.8% from the prior-year quarter’s $34 million.  The result of this segment benefited from stable commodity margins, which included the write-downs of inventory to lower period-end market prices.