Williams Cos. (WMB) Stock Declining as Oil Reaches 3-Week Low

NEW YORK (TheStreet) -- Shares of Williams Companies  (WMB) are down by 1.42% to $56.31 in mid-afternoon trading on Monday, as crude futures reached three-week lows today due to the ongoing Greek debt crisis, which has now resulted in the shutdown of Greece's banks and stock market until next week.

Greece imposed capital controls which has caused investors to avoid risky assets and also weakened the outlook for demand, Reuters reports.

Additionally, Iran is looking to extend its negotiations regarding lifting Western sanctions on its oil exports, which is also weighing on oil prices, Reuters noted.

Crude oil (WTI) is lower by 2.21% to $58.31 per barrel and Brent crude is slipping by 1.99% to $62 per barrel this afternoon, according to the CNBC.com index.

Greece has about $1.8 billion it must pay to the International Monetary Fund on Tuesday, but the growing concern is that the country will not be able to make that payment.

On Saturday, the country was involved in last ditch negotiations with its international creditors. The talks ended with Greece's Prime Minister Alexis Tsipras announcing a referendum for July 5, to vote on measures its creditors have demanded in return for more financial aid.

Separately, TheStreet Ratings team rates WILLIAMS COS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WILLIAMS COS INC (WMB) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 50.00% to $669.00 million when compared to the same quarter last year. In addition, WILLIAMS COS INC has also vastly surpassed the industry average cash flow growth rate of -53.17%.
  • The gross profit margin for WILLIAMS COS INC is rather high; currently it is at 50.52%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.07% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, WILLIAMS COS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Despite the weak revenue results, WMB has significantly outperformed against the industry average of 38.7%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • WILLIAMS COS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WILLIAMS COS INC increased its bottom line by earning $2.82 versus $0.64 in the prior year. For the next year, the market is expecting a contraction of 66.3% in earnings ($0.95 versus $2.82).
  • You can view the full analysis from the report here: WMB Ratings Report

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