Williams Earnings: Diversity of Operations Drives Growth Despite Low Gas Prices

Williams’ second-quarter results met our expectations, as the firm reaffirmed 2023 EBITDA guidance of a midpoint of $6.6 billion, matching our forecast. After updating our model, we will maintain our $32 per share fair value estimate and narrow moat rating. The diversity of the firm’s operations, in our view, really allows it to drive growth in just about any natural gas price environment, including the current weak environment. Quarterly EBITDA increased 8% to $1.6 billion from last year’s levels, primarily due to contributions from the MountainWest and NorTex acquisitions and higher revenues from its Northeast G&P systems (for example, the Ohio Valley Midstream joint venture, the Susquehanna supply hub, and the Blue Racer joint venture). At this stage, the ongoing contributions from new projects and organic volumes should more than offset the expected weaker contributions from gas marketing in the second half of 2023.