Williams

(WMB) - Get Report

still has some juice left.

The Tulsa energy company -- which nearly fizzled out during a merchantenergy meltdown -- is posting brighter results and offering glowing promisesfor the future. The company Thursday blazed past fourth-quarter profit estimates and narrowed its full-year loss.

The company's latest results lit a fire beneath the company'sshares, which rocketed more than 10% to $11 in the pre-market session, butflamed out during the regular session, as investors turned a brighter light on the company's latest numbers.

Williams' stock was down 8 cents, or 0.8%, at $9.89 early Thursday morning. And Tulsa money manager Fredric E. Russell questions why the stock fetches even that much.

"I think it can be attributed to a slick presentation of financialresults and widespread ignorance in the Wall Street coverage," said Russell,who has no position in the stock. "The Wall Street analysts will beencouraged to take a very accommodating, kind view of this report."

To be fair, Williams nearly quadrupled Wall Street profit expectationsby delivering fourth-quarter operating earnings of 11 cents a share. But thecompany continues to lose money. Overall, it reported a 2003 loss of $505million, or $1.03 a share, that relied on profits from a discontinued powerbusiness to improve upon prior-year results. And its eye-popping jump inrevenues -- which more than tripled to $3.5 billion in the fourth quarteralone -- came almost entirely from accounting changes.

"It's like comparing apples to oranges," Williams spokesman Kelly Swanexplained.

But Russell offered an explanation of his own.

"They're a bunch of financial magicians," he said of company management."When it comes to creative accounting, there is no peer for Williams."

Russell questioned the company's definition of recurring profits inparticular. Excluding special items, most of the company's "core" businessesreported essentially flat or negative profit growth for the year. But thecompany's power business -- which is currently up for sale -- reported a $134million profit that reversed a year-earlier loss. Russell contends thatpower profits should be excluded from ongoing earnings because they are"supposedly a disappearing act."

Williams itself reiterated plans to sell the business -- while countingits profits -- in its earnings report on Thursday.

"In the interim, Williams' strategy is to manage this business -- whichcontinues to play a significant role in the company's financialperformance -- to reduce risk, generate cash and honor contractualobligations," the company stated.

For now, Williams is touting its recent achievements and pledging togrow earnings in the future. During 2003, the company simultaneouslyincreased its cash and lowered its debt after shedding $3 billion worth ofassets. Looking forward, the company expects to shift its focus to profitgrowth in its remaining core businesses.

Williams CEO Steve Malcolm was quick to applaud the company'sperformance.

"The improvement in our results is indicative of the significant stepswe've taken to restructure our company," Malcolm stated. "The progress we'vemade toward strengthening our finances since this time last year defines thekind of discipline we will continue to exercise this year and in the yearsahead."