Summary
Williams Companies, Inc. (WMB) filed an 8-K on June 11, 2002, reporting a significant revision to its 2002 financial outlook, primarily driven by a reduction in its financial commitment to its Energy Marketing and Trading segment. This strategic shift acknowledges the uncertain industry environment and aims to realign the company's financial exposure within this business unit. The company has lowered its 2002 guidance for recurring profit in the Energy Marketing and Trading segment to a range of $750 million to $1 billion, down from previous guidance of $1.3 billion to $1.6 billion. Despite this reduction, the segment is still expected to generate substantial cash, with an estimated $500 million of the profit in cash and $700 million in free cash flow for the year. Concurrently, Williams has revised its 2002 recurring earnings per share (EPS) guidance downwards to $1.35-$1.70 per share, from the prior $2.15-$2.30 per share.
Key Highlights
- 1Williams Companies is reducing its financial commitment to its Energy Marketing and Trading segment due to an uncertain industry environment.
- 22002 recurring profit guidance for the Energy Marketing and Trading segment is lowered to $750 million - $1 billion, from $1.3 billion - $1.6 billion.
- 3Despite the reduction, the Energy Marketing and Trading segment is still projected to generate $700 million in free cash flow for 2002.
- 4An estimated $500 million of the revised profit from the segment is expected to be in cash.
- 52002 recurring earnings per share (EPS) guidance is reduced to $1.35 - $1.70 per share, down from $2.15 - $2.30 per share.
- 6Second quarter 2002 recurring EPS is projected to be between $0.20 and $0.25.