The Tulsa, Oklahoma-based global energy and communications will slash dividends by 69 percent to 20 cents per share from 64 cents per share in the third quarter to finance the transaction according to a release. In two years, Williams Companies aims to double its capacity on Transco from 2010 levels.
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Due primarily to a $341 million non-cash pre-tax impairment charge associated with held-for-sale Canadian operations, Williams Partners reported q2 2016 unaudited net loss of $90 million, a $390 million unfavorable change from q2 2015 net income.
Total revenue decreased 5.5% year over year in the quarter to $1,730 million from $1,830 million. Moreover, the bottom line improved from the prior-year figure of 15 cents per share.
Operating and maintenance expenses came in at $394 million as against $437 million in the second quarter of 2015.
Williams Cos. became the latest pipeline company to cut its quarterly dividend in the face of low energy prices and questions about its strategy as a standalone company.
Williams also unveiled a distribution reinvestment plan that will allow it and other investors in Williams Partners to forego payouts from the partnership in exchange for new Williams Partners units.
Williams Partners carries a Zacks Rank #3 (Hold).
Williams’ adjusted earnings were 19 cents a share, missing the 20-cent average of seven analysts’ estimates compiled by Bloomberg.
Williams Companies Inc (NYSE:WMB) now has mean rating of 2.1 while 4 analyst have recommended the shares as “BUY”, 3 commented as “OUTPERFORM” and 5 commented as “HOLD”.
Between now and the end of 2017 Williams plans to reinvest about $1.7 billion in Williams Partners through a Distribution Reinvestment Program (DRIP) funded by a reduced quarterly cash dividend.
Williams (WMB) and Williams Partners announced immediate measures to strengthen their credit profile and fund the development of a significant portfolio of fee-based growth projects at Williams Partners. The Williams cut is the largest since Kinder Morgan Inc.
The recent traded volume of 36.32 million shares higher than its average volume of 11.76 million shares. Now the company has earned “Buy” from 3 equity analysts. He compared financial metrics of KMI and Williams and wrote that Williams compares favorably with KMI.
The pair, who strongly favored the merger with Energy Transfer, indicated they wouldn’t sell their stock and leave quietly, potentially setting the stage for a proxy fight to remove the rest of the board.
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“This is very clear and identifiable growth in our business that’s coming from all these fully contracted projects”, he said. “I really think we’ve got ourselves in a real sweet spot”. “That opportunity sits out there as upside, perhaps, in the future”, Armstrong said.
