By Tess Stynes
Williams Cos. (WMB) swung to a fourth-quarter profit, with a
boost from its recently merged master-limited partnerships, though
its pipeline business lowered its 2015 outlook.
Williams recently completed the merger of two MLPs it
controls--William Partners and Access Midstream Partners--into one
giant natural-gas pipeline system under the Williams Partners
name.
The new Williams Partners also cut its guidance for 2015
earnings before interest, taxes, depreciation and amortization to
$4.5 billion, from its previous view of about $5 billion, citing
sharply lower assumptions for commodities prices.
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, investors in the
sector have been concerned that low prices will lead to reduced
production in the industry. Many oil and gas producers have reduced
their 2015 capital budgets, with some announcing layoffs. Earlier
this month, Plains All American Pipeline LP lowered the midpoint of
its 2015 profit guidance, also citing weak commodity prices.
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. Access Midstream gathers natural gas and natural-gas
liquids pumped from wells in Texas, Pennsylvania and Oklahoma,
processes them and delivers them to larger pipelines.
Chief Executive Alan Armstrong said that in the latest quarter
Williams Partners' fee-based revenues continued to grow and the
company began commissioning major new assets, including Gulfstar
One, Keathley Canyon Connector and its expanded Geismar plant.
"However, the sharp decline in commodity prices, the delay in
the startup of Geismar and higher costs associated with the
commissioning of these large-scale assets, reduced our overall
results," Mr. Armstrong said.
Overall, Williams Cos. reported a profit of $193 million, or 26
cents a share, compared with a year-earlier loss of $14 million, or
two cents a share, a year earlier. Excluding including impacts
related to its Geismar plant and the merger of Williams Partners
and Access Midstream and other items, per-share earnings from
continuing operations fell to 16 cents from 22 cents. Analysts
polled by Thomson Reuters most recently projected per-share
earnings of 23 cents.
Write to Tess Stynes at tess.stynes@wsj.com
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