The Williams Companies, Inc.

Williams reported a solid quarter and managed an all-around beat driven by strong performance across its core businesses and JV upstream operations. Although operating and maintenance expenditures increased, primarily due to more frequent maintenance tasks, the company is still on track to meet its goals. Northeast G&P business grew by $22 million. As the management continues to meet the rising need for clean, secure, and reasonably priced energy, their natural gas approach has demonstrated its ability to generate upside profits and withstand commodity price cycles. Williams has maintained its natural gas-focused strategy. The signals emerging from the market indicate that this strategy will continue to deliver large growth over the long term and in the current climate, where it is already performing well. The company’s contracted transmission capacity, as well as quarterly natural gas gathering volumes, continue to rise significantly. Among key updates, Williams acquired MountainWest Pipelines Holding from Southwest Gas Holdings. This is an important step towards expanding the company’s core regulated utility business. We give Williams Companies an ‘Outperform’ rating with a revised target price.