Williams sees drop in net income with less revenue coming in

Williams’ President and CEO Alan Armstrong is spot on when he says it’s clear the company’s focus on natural gas volume growth and—-continued confidence in low-price natural gas continues to drive demand for services.

His comments came after the company reported unaudited second quarter 2018 net income of $135 million, an increase of $54 million from the second quarter 2017. Williams indicated the favorable change was driven primarily by a $32 million increase in operating income due to an increase in service revenues.

But, Williams also had less production in other areas and consequently, some of its income was down from a year ago.

It also attributed the increase to NGL margins partially offset by the absence of $25 million of operating income earned in second-quarter 2017 by the firm’s former olefins operations. Then there was the $62 million gain from the deconsolidation of Williams Partners’ interests in the Jackalope Gas Gathering system in the northwest.

Unaudited net income year to date is $287 million, a drop of $167 million from a year ago. The company said a year ago, it had a $269 million gain from joint-venture interests in the Permian Basin and Marcellus Shale.

Still, Williams had a second-quarter 2018 adjusted EBITDA of $1.11 billion. But it was a $3 million drop from the second quarter of 2017 and Williams blamed less production on its Discovery system and less business due to the sale of its Geismar olefins facility in Louisiana.

Declines were also reported in year-to-date adjusted EBITDA which totaled $2.245 billion, a drop of 13 million from the same six month reporting period in 2017.

But Armstrong remains optimistic.

“We look forward to an even stronger second half of the year as the Atlantic Sunrise project nears completion and producer activity on our systems in the Northeast and Wyoming is ramping up. We are also excited about the transactions announced earlier this week. Selling assets in a maturing basin at attractive multiples, and redeploying that capital to higher growth basins enhances our position to capitalize on future growth opportunities and follows our strategy to connect the best supplies to the best markets.”

The company offered more details in the report.