Williams Companies Reports Q4 Earnings: A Mixed Bag of Results

The Williams Companies, Inc. (WMB) announced its fourth-quarter 2024 adjusted earnings per share of 47 cents, beating the Zacks Consensus Estimate of 45 cents. Strong performances from the Northeast G&P and West segments contributed to this positive outcome.

Despite this beat, earnings dipped slightly from the previous year’s 48 cents, primarily due to a weaker performance in the Gas & NGL Marketing Services and rising costs in the Transmission & Gulf of Mexico unit.

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The Tulsa, OK-based company reported revenues of $2.7 billion, falling short of the Zacks Consensus Estimate of $2.9 billion. This revenue figure also marked a decline from $2.8 billion in the same quarter last year, attributed to decreased service revenues.

Williams Companies Price, Consensus, and EPS Surprise

Williams Companies price-consensus-eps-surprise-chart

In 2024, Williams advanced key projects like the Transco Regional Energy Access and the enhancements to Southside Reliability and Carolina Market Link. The company initiated significant projects including MountainWest and Deepwater Gulf, while also enhancing Gulf Coast storage with 115 Bcf to meet rising LNG export and power generation demands. Notably, six high-return transmission projects were announced to add 885 MMcf/d of capacity serving critical demand regions.

The firm also consolidated its interests in the Gulf Discovery system and the Wamsutter upstream joint venture while divesting from Aux Sable. Furthermore, it focused on reducing emissions and enhancing its sustainability initiatives.

Highlights from WMB’s Q4 2024 Performance

Adjusted EBITDA was reported at $1.8 billion for the quarter, up 3.2% year-over-year due to growing natural gas demand fueled by low-cost U.S. natural gas. However, cash flow from operations significantly declined, reaching $1.2 billion, a drop of 32.8% compared to the same quarter of 2023.

Breaking Down WMB’s Business Segments

Transmission & Gulf of Mexico: This segment posted an adjusted EBITDA of $826 million, improving by 9.8% from last year, driven by contributions from acquisitions and expansions. However, this fell short of the Zacks Consensus Estimate of $849 million due to higher costs.

West: Adjusted EBITDA from this segment reached $345 million, a 6.8% increase from $323 million a year prior, surpassing the consensus estimate of $332 million. The strong results came despite lower gathering volumes, which amounted to 5.46 Bcf/d compared to 6.03 Bcf/d a year ago.

Northeast G&P: The Northeast segment achieved adjusted EBITDA of $499 million, a rise from $485 million a year earlier, exceeding the Zacks Consensus Estimate by 2.8%. Increased rates at various hubs helped, despite a 4.8% drop in gathering volumes from the previous year.

Gas & NGL Marketing Services: This unit recorded an adjusted EBITDA of $36 million, down from $69 million a year ago, attributed to lower marketing margins. The consensus estimate for adjusted EBITDA in this unit was $42.5 million.

Costs, Capital Expenditure, and Financial Position

Total costs and expenses for the quarter hit $2 billion, up nearly 17.6% year-over-year. Capital expenditures amounted to $2.6 billion. By December 31, 2024, Williams held $60 million in cash along with a long-term debt of $24.7 billion, leading to a debt-to-capitalization ratio of 62.5%.

2025 Outlook for Williams Companies

Williams has revised its guidance for 2025, now projecting adjusted EBITDA between $7.45 billion and $7.85 billion, which represents a 3% increase at the midpoint. The company plans to maintain its capital expenditures, estimating growth Capex between $1.65 billion and $1.95 billion and maintenance Capex of $650 million to $750 million, excluding $150 million for emissions reduction and modernization.

To improve its leverage ratio for 2025, the company targets a midpoint of 3.55x and announced a dividend increase of 5.3% to $2 per share, compared to $1.90 in 2024.

Currently, WMB holds a Zacks Rank #3 (Hold). For a complete list of today’s Zacks #1 Rank (Strong Buy) stocks, check here.

Key Energy Earnings Updates

As earnings season progresses, several notable energy companies have reported their results. Here’s a brief look at some of them.

Liberty Energy (LBRT), based in Denver, CO, announced an adjusted net income of 10 cents per share, edging past the Zacks Consensus Estimate of 9 cents. This was mainly due to a reduction in costs and expenses year-over-year. However, the figure fell short of the previous year’s 54 cents per share, reflecting challenges in equipment and service execution as well as decreased activity.

Before releasing its earnings, Liberty Energy’s board declared a quarterly dividend of 8 cents per share to Class A common shareholders of record as of March 6, which remains unchanged from the previous quarter. The dividend will be paid on March 20.

In 2024, Liberty returned $175 million to shareholders through share repurchases and dividends, including the retirement of 1,581,495 shares of Class A common stock at an average price of $17.88 per share.

Energy infrastructure provider Kinder Morgan, Inc. (KMI) also reported its fourth-quarter 2024 adjusted earnings per share of 32 cents,