Williams (WMB) Q1 Earnings Beat Estimates, Revenues Miss

Core Insights - The Williams Companies, Inc. (WMB) reported first-quarter 2024 adjusted earnings per share of 59 cents, exceeding the Zacks Consensus Estimate of 49 cents and improving from 56 cents in the same period last year [1] - Revenues for the quarter were $2.8 billion, falling short of the Zacks Consensus Estimate of $2.9 billion and down from $3.1 billion year-over-year, attributed to lower service revenues and net losses from commodity derivatives [1] Financial Performance - Adjusted EBITDA for the quarter was $1.9 billion, reflecting a year-over-year increase of 7.7% [2] - Cash flow from operations was $1.2 billion, a decrease of 18.5% compared to the same quarter in 2023 [2] Segmental Analysis - Transmission & Gulf of Mexico segment reported adjusted EBITDA of $839 million, up 15.2% year-over-year, driven by acquisitions and expansion projects [3] - West segment's adjusted EBITDA totaled $328 million, a 14.7% increase from the prior year, attributed to acquisitions and improved commodity margins [3] - Northeast G&P segment achieved adjusted EBITDA of $504 million, up 3.9% from $485 million in the previous year, linked to higher rates and volumes [3] - Gas & NGL Marketing Services unit generated adjusted EBITDA of $189 million, down from $231 million in the prior year [4] Costs, Capital Expenditure & Balance Sheet - Total costs and expenses for the quarter were $1.8 billion, an increase of 2.2% from $1.7 billion year-over-year [5] - Total capital expenditure was $544 million, slightly down from $545 million a year ago [5] - As of March 31, 2024, the company had cash and cash equivalents of $667 million and long-term debt of $24.1 billion, with a debt-to-capitalization ratio of 65.9% [5] Infrastructure Expansion - The company completed the acquisition of six storage facilities with a total capacity of 115 Bcf across Louisiana and Mississippi, aimed at meeting rising LNG export and power generation demands [6] - Williams inaugurated Transco's Carolina Market Link and received FERC notice to proceed with Transco's Commonwealth Energy Connect [6] - Construction commenced on Transco's Southside Reliability Enhancement and Southeast Energy Connector projects, with the initial phase of Transco's Regional Energy Access generating earnings during the quarter [6] Guidance - The company anticipates adjusted EBITDA in the range of $6.8 billion to $7.1 billion for the top half of 2024, with growth capex between $1.45 billion and $1.75 billion [9] - Maintenance capex is expected to be between $1.1 billion and $1.3 billion, including $350 million for emission reduction and modernization initiatives [9] - A 6.1% increase in dividends to $1.90 per share is expected in 2024, up from $1.79 in 2023 [9] - For 2025, adjusted EBITDA is projected between $7.2 billion and $7.6 billion, with growth capex of $1.65 billion to $1.95 billion [9]