By Tess Stynes
Williams Cos. (WMB) said its first-quarter earnings fell sharply
on lower natural-gas-liquids margins.
The year earlier period also included insurance proceeds related
to a June 2013 explosion at its Geismar plant in Louisiana.
Williams in February completed the merger of two master-limited
partnerships it controls--William Partners and Access Midstream
Partners--into one giant natural-gas pipeline system under the
Williams Partners name.
Williams Partners, a major pipeline company based in Tulsa,
Okla., has sought to increase its presence in shale formations
where drillers are using new technologies to produce more oil and
natural gas. Earlier this month Williams Partners reached a $575
million deal to buy an additional 21% equity interest in Utica East
Ohio Midstream LLC, raising its interest in the company to 70%.
Like many pipeline companies, Williams Partners generates
revenue from fees, reducing some of the direct exposure to the
recent volatility of oil and gas prices.
However, the MLP hasn't been immune to pressures from low
commodities prices and in February cut its 2015 guidance for
earnings before interest, taxes, depreciation and amortization to
$4.5 billion. On Wednesday, the company said it expects Ebitda at
the low end of its February guidance, citing impacts related to the
extended ramp up of the Geismar plant and impacts from low
commodities prices on volume and margins.
Chief Executive Alan Armstrong said "first quarter 2015 results
showed strong fee-based revenue growth for Williams Partners and we
expect the second quarter to be even higher with Gulfstar One and
Keathley Canyon Connector nearing full production and additional
projects being placed in service."
Overall, Williams Cos. reported a profit of $70 million, or nine
cents a share, down from $140 million, or 20 cents a share, a year
earlier. Excluding impacts related to the Geismar plant, expenses
related to the merger of Williams Partners and Access Midstream and
other items, per-share earnings from continuing operations fell to
16 cents from 28 cents.
Analysts polled by Thomson Reuters expected per-share profit of
13 cents.
Williams also affirmed its 2015 dividend guidance and dividend
growth estimate through 2017.
Write to Tess Stynes at tess.stynes@wsj.com
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