Williams Swings to Unexpected Loss
February 17 2016 - 6:20PM
Dow Jones News
Williams Cos. swung to an unexpected fourth-quarter loss as the
pipeline giant posted a big write-down, mostly related to low
commodities prices and weaker market values for affiliate Williams
Partners LP and its peers.
The Tulsa, Okla., company also said the write-downs reflected
Williams' 2014 acquisition of Access Midstream Partners.
Shares of the Tulsa, Okla., company, which have skidded 68% in
the past 12 months, fell 4% to $15.07 in recent after-hours trading
as per-share earnings, excluding certain one-time items, missed
expectations.
Williams is being acquired by Energy Transfer Equity LP in a
$32.6 billion deal reached in September. The September deal price
was below Energy Transfer's $48 billion offer that Williams had
rejected in June.
Many pipeline companies had said they were mostly insulated from
low energy prices because most of their revenue is based on fixed
fees. However, in recent quarters, signs that the pipeline industry
isn't immune to the commodities rout has slammed the sector's
stocks and added to concerns about whether the Williams-Energy
Transfer deal would close.
Adding to concerns about the pending tie-up, Chesapeake Energy
Corp, which has been struggling under a heavy debt load and is one
of Williams's largest clients, recently denied reports about
planning to file for bankruptcy protection. Meanwhile, Energy
Transfer announced the departure of finance chief Jamie Welch. CFOs
rarely leave companies while a merger is pending.
In its earnings release Wednesday, Williams said its board is
unanimously committed to the completion of the merger with Energy
Transfer. Williams also said integration planning is under way.
The deal requires the approval of Williams shareholders.
Over all, Williams reported a loss of $701 million, or 94 cents
a share, compared with a profit of $193 million, or 26 cents a
share, a year earlier. The latest period included pretax
write-downs totaling $2.1 billion. Excluding such one-time items,
adjusted earnings from continuing operations were flat at a penny a
share.
Revenue decreased 6.3% to $2.01 billion.
Analysts polled by Thomson Reuters expected per-share profit of
22 cents and revenue of $1.95 billion.
(END) Dow Jones Newswires
February 17, 2016 18:05 ET (23:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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