Williams Cos.' 2nd-Quarter Profit Off 42%; Williams Partners' Down 43%

08/01/2012| 04:58pm US/Eastern

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   By Tess Stynes 
 

Williams Cos.'s (>> Williams Companies, Inc.) second-quarter earnings fell 42%, while midstream and interstate gas-pipeline asset-holder Williams Partners LP's (>> Williams Partners L.P.) profit decreased 43%--the latest companies to feel the effects of weaker natural-gas-liquids margins.

Alan Armstrong, chief executive of Williams Partners' general partner, Wednesday said "earnings were negatively affected by a rapid, significant decline in NGL prices based on a number of factors, including the record-warm winter and high levels of downtime in third-party ethylene crackers."

Williams Partners recently completed its roughly $2.5 billion acquisition of Caiman Midstream LLC, helping expand its presence in the Marcellus Shale region. The company and other investment partners also agreed recently to invest $800 million in a joint venture with Caiman Energy II aimed at supporting oil and gas production in the Utica Shale region.

Pipeline companies in the U.S. are undergoing a wave of acquisitions, joint ventures and expansions as they seek to adapt to the new geography of energy production brought about by shale production.

Williams reported a profit of $132 million, or 21 cents a share, down from $227 million, or 38 cents a share, a year earlier. The year-earlier period included $56 million in income from discontinued operations. Excluding acquisition- and transaction-related costs at Williams Partners and other items, adjusted per-share earnings from continuing operations were down at 22 cents, down from 29 cents. The company recently projected about 21 cents a share.

Williams Partners reported a profit of $193 million, or 29 cents a common unit, down from $338 million, or 91 cents a unit, a year earlier.

Analysts polled by Thomson Reuters most recently projected earnings of 50 cents on revenue of $1.82 billion.

Profit from the midstream-gas-and-liquids segment slumped nearly 40%, while earnings from the gas-pipeline segment declined 3.3%.

Williams last year opted against an initial public offering of its exploration-and-production business, instead opting for a spinoff of a public company, named WPX Energy Inc. (>> WPX Energy Inc), which was completed early this year. WPX plans to report its second-quarter financial results Thursday.

Williams shares were flat at $31.85 in light after-hours trading Wednesday. Williams Partners common units closed Wednesday at $53.04 and were inactive in after-hours trading.

Write to Tess Stynes at tess.stynes@dowjones.com

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