Williams to Report Q1 Earnings: What Surprise Awaits Investors?

The Williams Companies, Inc. WMB is set to release first-quarter 2025 results on May 5. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a profit of 57 cents per share on revenues of $3.1 billion.

Let’s delve into the factors that might have influenced the oil and gas pipeline operator’s performance during the first quarter of 2025. But it’s worth taking a look at Williams’ previous-quarter results first.

Highlights of Q4 Earnings & Surprise History

In the last reported quarter, the energy infrastructure provider beat the consensus mark on the back of the Northeast G&P and West segments’ strong results. Williams had reported adjusted earnings per share of 47 cents, beating the Zacks Consensus Estimate of 45 cents. However, revenues of $2.7 billion generated by the firm missed the consensus mark of $2.9 billion due to weakness in the Gas & NGL Marketing Services unit.

WMB beat the Zacks Consensus Estimate for earnings in each of the last four quarters, resulting in an earnings surprise of 9.4%, on average. 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 first-quarter bottom line has remained unchanged in the past seven days. The estimated figure indicates a 3.4% fall year over year. The Zacks Consensus Estimate for revenues, however, suggests a 13.4% increase from the year-ago period.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Factors to Consider

Williams’ Transmission & Gulf of Mexico unit — which includes the company’s crown jewel and the nation’s largest and fastest-growing natural gas pipeline system, Transco — is expected to do well in the to-be-reported quarter, driven by the growing heating, power generation and LNG export needs. The unit is also expected to benefit from the segment’s healthy dynamics in the deepwater business and the benefits associated with various deepwater projects. The Zacks Consensus Estimate for the quarter’s adjusted EBITDA is pegged at $902 million. The number suggests a 7.5% increase from a profit of $839 million reported in the year-ago quarter.

In the fourth quarter, the company’s West Segment delivered strong performance driven by its DJ Basin acquisition. We expect this uptick to continue in the first quarter of 2025 as well.

But on a bearish note, higher costs might play spoilsport. Investors should know that WMB’s fourth-quarter total costs and expenses of $2 billion increased almost 17.6% from the year-ago quarter’s figure. This trend is likely to continue in the to-be-reported quarter due to project-related costs and inflationary pressure.

What Does Our Model Say About WMB Stock?

Our proven model does not conclusively predict an earnings beat for The Williams Companies 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. However, that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

WMB’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -0.35%.

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

Stocks to Consider

While an earnings beat looks uncertain for WMB, here are some firms from the energy space that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Calumet, Inc. CLMT has an Earnings ESP of +2.02% and a Zacks Rank #3. The firm is scheduled to release earnings on May 9.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the Zacks Consensus Estimate for Calumet’s 2025 earnings per share indicates 73.41% year-over-year growth. Valued at around $900.28 million, Calumet’s shares have lost 34.6% in a year.

Delek US Holdings, Inc. DK has an Earnings ESP of +6.36% and a Zacks Rank #3. The firm is scheduled to release earnings on May 7.

Notably, the Zacks Consensus Estimate for Delek US Holding’s 2025 earnings per share indicates 21.47% year-over-year growth. Valued at around $819.55 million, Delek US Holdings’ shares have lost 55.4% in a year.

Coterra Energy Inc. CTRA has an Earnings ESP of +2.84% and a Zacks Rank #3. The firm is scheduled to release earnings on May 5.

Notably, the Zacks Consensus Estimate for Coterra Energy’s 2025 earnings per share indicates 70.24% year-over-year growth. Valued at around $19.39 billion, Coterra Energy’s shares have lost 10.6% in a year.

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

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