Williams Cos. Swings to Loss
May 04 2016 - 7:30PM
Dow Jones News
Williams Cos. swung to a first-quarter loss and the pipeline
company's chief executive disclosed additional cost cuts, including
reducing its workforce by 10%.
The Tulsa, Okla., company is in the process of being acquired in
a $32.6 billion deal by Energy Transfer Equity LP, which along with
affiliate Energy Transfer Partners LP posted lower revenue for the
three-month period ended in March.
Williams Chief Executive Alan Armstrong said in prepared remarks
that the company made additional cost-cutting decisions at the end
of the first quarter to help offset a commodities rout that has
reduced demand from energy producers.
The pending deal between Energy Transfer and Williams, which has
been contentious from the start, has become more challenging as low
oil prices have made it difficult for pipeline companies to raise
money. Most recently, the companies are in a legal dispute over
private shares that the buyer in the deal, Energy Transfer Equity,
issued to help finance the merger.
Last month, Williams sued Energy Transfer Equity over the
offering of convertible units.
Energy Transfer, which previously said Williams had breached the
merger agreement, disclosed a countersuit against Williams in a
regulatory filing earlier Wednesday. Energy Transfer accused
Williams of a material breach of the deal, citing Williams's
attempt to block the convertible units offering as well as
Williams's related suit against Energy Transfer Chief Executive
Kelcy Warren in a Texas court.
In its first-quarter release, Williams said its board is
unanimously committed to enforcing its rights under the merger
deal, while Energy Transfer didn't comment on the pending deal in
its earnings report.
Over all, Williams Cos. reported a loss of $65 million, or 9
cents a share, compared with a year-earlier profit of $70 million,
or 9 cents a share. Excluding one-time items, per-share earnings
from continuing operations fell to 3 cents from 16 cents. Analysts
polled by Thomson Reuters expected per-share profit of 22 cents
Energy Transfer Equity reported a profit of $312 million, or 30
cents a common unit, up from $284 million, or 26 cents a unit, a
year earlier. The latest period included a tax benefit of $55
million. Revenue decreased 23% to $7.98 billion.
Analysts polled by Thomson Reuters expected per-unit profit of
29 cents and revenue of $10.28 billion.
Energy Transfer Partners reported a profit of $311 million, up
from $281 million a year earlier. On a per-unit basis, which
reflects general partner interests, the per-unit loss was 15 cents,
compared with a year-earlier per-unit loss of 17 cents. Revenue
slumped 56% to $4.48 billion.
Analysts expected per-unit profit of 26 cents and revenue of
$7.58 billion.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
May 04, 2016 19:15 ET (23:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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