Summary
Williams Companies, Inc. (WMB) reported a decrease in net income attributable to the company for the first quarter of 2013, falling to $161 million ($0.23 per share) from $423 million ($0.71 per share) in the same period of 2012. This decline was primarily driven by a significant drop in product sales revenue, largely due to lower NGL production and marketing volumes and prices, as well as higher product costs. While service revenues saw a modest increase, it was not enough to offset the decline in product sales. The company is actively managing its portfolio, with significant capital investments planned for expansion projects, particularly within its Williams Partners segment, focusing on natural gas gathering, processing, and transportation infrastructure in key regions like the Marcellus Shale. Management expressed confidence in its strategy to transition towards a more fee-based business model and anticipates continued dividend growth, projecting a 20% annual increase for 2013-2015. However, investors should note the substantial capital expenditures planned and the inherent risks associated with energy infrastructure development and commodity price volatility.
Financial Highlights
52 data points| Revenue | $1.81B |
| Cost of Revenue | $790.00M |
| Gross Profit | $1.02B |
| SG&A Expenses | $132.00M |
| Operating Expenses | $1.38B |
| Operating Income | $426.00M |
| Net Income | $161.00M |
| EPS (Basic) | $0.24 |
| EPS (Diluted) | $0.23 |
| Shares Outstanding (Basic) | 682.05M |
| Shares Outstanding (Diluted) | 687.14M |
Key Highlights
- 1Net income attributable to WMB decreased to $161 million in Q1 2013 from $423 million in Q1 2012, reflecting lower product sales and higher costs.
- 2Total revenues declined to $1.81 billion from $2.02 billion year-over-year, primarily due to a significant decrease in product sales ($1.10 billion vs. $1.34 billion).
- 3Operating income decreased to $426 million from $527 million, impacted by lower NGL margins and higher operating and maintenance expenses.
- 4Capital expenditures for Q1 2013 were substantial at $713 million, significantly up from $329 million in the prior year, indicating strong investment in growth projects.
- 5The company paid a higher quarterly dividend of $0.33875 per share in March 2013 compared to $0.25875 in the prior year, signaling confidence in future cash flows and a commitment to returning capital to shareholders.
- 6Williams Partners L.P. (WPZ) remains a key segment, with significant planned capital investments and a strategy focused on interstate natural gas transmission and midstream infrastructure.