Summary
Williams Companies, Inc. (WMB) reported its second-quarter 2012 results, indicating a decline in net income attributable to the company compared to the same period in the prior year. This decrease was primarily driven by lower NGL production revenues and margins, influenced by falling NGL prices. The company also experienced an increase in selling, general, and administrative expenses, partly due to acquisition-related costs. Despite the year-over-year earnings decline, WMB highlighted significant strategic acquisitions in the Marcellus Shale region, including the Caiman Eastern Midstream and Laser Gathering System, bolstering its midstream footprint. The company also provided an optimistic outlook for dividend growth and announced substantial capital investment plans for the remainder of 2012, emphasizing a strategic shift towards a more fee-based business mix to mitigate commodity price volatility. Management reiterated confidence in sufficient liquidity and financial resources to fund operations and growth initiatives.
Financial Highlights
49 data points| Revenue | $1.85B |
| Cost of Revenue | $900.00M |
| Gross Profit | $946.00M |
| SG&A Expenses | $149.00M |
| Operating Expenses | $1.51B |
| Operating Income | $332.00M |
| Net Income | $132.00M |
| EPS (Basic) | $0.21 |
| EPS (Diluted) | $0.21 |
| Shares Outstanding (Basic) | 621.48M |
| Shares Outstanding (Diluted) | 626.62M |
Key Highlights
- 1Net income attributable to The Williams Companies, Inc. decreased to $132 million ($0.21 per share) for Q2 2012, down from $227 million ($0.39 per share) in Q2 2011.
- 2Revenues for Q2 2012 were $1.85 billion, a decrease from $1.98 billion in Q2 2011, primarily due to lower natural gas liquid (NGL) prices.
- 3The company completed significant acquisitions in the Marcellus Shale: the Caiman Eastern Midstream acquisition for approximately $2.3 billion and the Laser Acquisition for $325 million plus WPZ units, enhancing its midstream presence.
- 4Williams Partners' segment profit decreased by $132 million year-over-year, largely due to a $64 million decrease in NGL margins caused by lower NGL prices.
- 5The company announced plans for significant dividend growth, with expected total 2012 dividends of $1.20 per share, a 55% increase from 2011.
- 6Planned capital expenditures for 2012 are substantial, totaling $6.66 billion, including WPZ equity for acquisitions, indicating a strong focus on growth and expansion.
- 7Despite current NGL margin pressures, management expects the business mix to transition towards more fee-based revenues over the long term, reducing commodity price sensitivity.