Calpine Suffers Shaky Start to New Year

"There's a larger financial story for Williams beyond the modest profit we reported for the first quarter," CEO Steve Malcolm said. "The disciplined investments we're making in our natural gas businesses are creating value in the near term and setting the stage for opportunities to deliver substantial shareholder value over the long term."

But asset sales, made to pay down debt, continue to whack away at results. Profits from the company's core natural gas businesses slid 17% to $318 million in the latest quarter. Earnings from gas pipelines dropped slightly to $149 million.

Meanwhile, exploration and production profits fell by nearly two-thirds, tumbling from $113.8 million to $51.5 million. Midstream earnings did inch up slightly to $117.7 million. And power segment losses narrowed dramatically, shrinking from $136 million to $33 million in the recent period.

"Things are much better at Williams than they were a year ago," Russell conceded. "But I don't know if they're good enough to warrant a call home to Mother."

Russell does, however, expect Williams to meet its reiterated 2004 guidance of 17 cents to 40 cents a share.

"I think it's positive that Williams has admitted that the guidance game is dependant on natural gas prices, which can be so unpredictable," he said. "No one is going to make a mistake by issuing that wide a range."

Narrow Target

CMS instead reiterated very specific full-year guidance of 85 cents a share -- 3 cents better than the consensus estimate -- when beating first-quarter profit expectations on Thursday.

The company actually swung to a first-quarter net loss of $11 million due to a big impairment charge on assets it recently sold in Australia. Operating profits also fell from a year ago but, at 44 cents per share, still managed to pass the consensus estimate by 3 cents.

Like others in the sector, CMS highlighted its recent progress and the opportunities that lie ahead.

"Our goal is to become a smaller, stronger company with more predictable earnings," CEO Ken Whipple explained, "and we're making progress toward that goal."

Investors shrugged off Thursday's news, however. Shares of CMS barely budged, slipping 2 cents to $8.52 around noon.