Williams to Report Q4 Earnings: What Surprise Awaits Investors?

The Williams Companies, Inc. WMB is set to release fourth-quarter 2025 results on Feb. 10. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of 57 cents per share on revenues of $3.12 billion.

Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance in the to-be-reported quarter. But it’s worth taking a look at Williams’ previous-quarter results first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the energy infrastructure provider reported weak performance in its West and Northeast G&P segments, which came in 1.6% and 1% below the consensus mark, respectively. Williams reported adjusted earnings per share of 59 cents, beating the Zacks Consensus Estimate of 51 cents. However, the Tulsa, OK-based oil and gas storage and transportation company’s revenues of $2.9 billion missed the Zacks Consensus Estimate by $113 million due to weaker-than-expected product sales revenues, which declined 27.5% compared with the estimate.

WMB’s earnings beat the Zacks Consensus Estimate twice in the last four quarters and missed twice, resulting in an average surprise of 0.87%.

This is depicted in the graph below: 

Williams Companies, Inc. (The) Price and EPS Surprise

Williams Companies, Inc. (The) price-eps-surprise | Williams Companies, Inc. (The) Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the fourth-quarter bottom line has witnessed three upward and no downward movements in the past seven days. The estimated figure indicates a 21.28% rise year over year. The Zacks Consensus Estimate for revenues implies a 13.67% surge from the year-ago period.

Factors to Consider Ahead of WMB’s Q4 Release

WMB makes money primarily by operating natural gas pipelines and midstream infrastructure across the United States. Its revenues come from transporting, processing and storing natural gas and natural gas liquids, as well as providing marketing services. In short, Williams earns fees from moving energy products through its extensive pipeline network and from related midstream services that connect producers to end markets.

WMB’s revenues are likely to have improved in the quarter to be reported. The Zacks Consensus Estimate for fourth-quarter revenues is expected to have increased from the year-ago quarter’s level. This can be attributed to the strong performance of West, Transmission & Gulf of America, Gas & NGL Marketing Services segments. We expect WMB to deliver steady performance in the quarter to be reported, supported by a reaffirmed adjusted EBITDA outlook at the midpoint of $7.75 billion within a range of $7.6-$7.9 billion.

The company is expected to have benefited from resilient natural gas demand and its fee-based infrastructure model, which provides stable cash flows. The Zacks Consensus Estimate for Transmission & Gulf of America’s fourth-quarter adjusted EBITDA is anticipated to rise 20% year over year, while West’s segment is expected to post a 13% increase.

We anticipate growth capital spending to have risen, indicating Williams’ increased commitment to the Louisiana LNG project with Woodside Energy. This investment is expected to enhance the company’s exposure to the expanding LNG export market and drive incremental earnings growth over the long term.

On the downside, rising expenses may weigh on results. Williams’ second-quarter total costs and expenses were higher than the year-ago quarter’s figure, and this upward trajectory is expected to have persisted in the quarter to be reported. Project-related spending combined with ongoing inflationary pressures might have continued to challenge margins.

What Does Our Model Say About WMB Stock?

Our proven model predicts an earnings beat for Williams this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. This is exactly the case here.

WMB’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +0.10%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

WMB’s Zacks Rank: Williams currently carries a Zacks Rank #3.

Other Stocks With the Favorable Combination

Here are some other firms from the other space that you may want to consider, as these, too, have the right combination of elements to post an earnings beat this reporting cycle.

IPG Photonics IPGP is scheduled to release earnings on Feb. 12. The firm has an Earnings ESP of +15.08% and a Zacks Rank #1.  You can see the complete list of today’s Zacks #1 Rank stocks here.

IPG Photonics is a global leader in high-performance fiber lasers and amplifiers used across industrial, medical and communications applications. The company generates revenues by providing advanced laser solutions that enable precision cutting, welding, marking and other manufacturing processes worldwide. IPG Photonics’ earnings missed the Zacks Consensus Estimate in three of the last four quarters and beat in the other one, resulting in an average surprise of 89.09%.

Agios Pharmaceuticals AGIO has an Earnings ESP of +5.74% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb. 12.

Agios Pharmaceuticals is a biopharmaceutical company based in Cambridge, Massachusetts, focused on developing and commercializing therapies for rare genetic diseases, particularly hemolytic anemias. The company’s earnings missed the Zacks Consensus Estimate in two of the last four quarters and beat in the other two, resulting in an average surprise of 4.21%.

Expedia Group EXPE has an Earnings ESP of +6.57% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb. 12.  The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed in the other one, resulting in an average surprise of 4.21%.

Expedia Group is a leading global online travel platform that operates brands such as Expedia, Hotels.com, Vrbo and Orbitz. The company generates revenues by offering travel bookings for flights, hotels, vacation rentals, car rentals and activities, connecting millions of travelers with suppliers worldwide.

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This article originally published on Zacks Investment Research (zacks.com).

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