Williams Cos. Swings to Loss

Williams Cos. swung to a first-quarter loss and the pipeline company's chief executive disclosed additional cost cuts, including reducing its workforce by 10%.

The Tulsa, Okla., company is in the process of being acquired in a $32.6 billion deal by Energy Transfer Equity LP, which along with affiliate Energy Transfer Partners LP posted lower revenue for the three-month period ended in March.

Williams Chief Executive Alan Armstrong said in prepared remarks that the company made additional cost-cutting decisions at the end of the first quarter to help offset a commodities rout that has reduced demand from energy producers.

The pending deal between Energy Transfer and Williams, which has been contentious from the start, has become more challenging as low oil prices have made it difficult for pipeline companies to raise money. Most recently, the companies are in a legal dispute over private shares that the buyer in the deal, Energy Transfer Equity, issued to help finance the merger.

Last month, Williams sued Energy Transfer Equity over the offering of convertible units.

Energy Transfer, which previously said Williams had breached the merger agreement, disclosed a countersuit against Williams in a regulatory filing earlier Wednesday. Energy Transfer accused Williams of a material breach of the deal, citing Williams's attempt to block the convertible units offering as well as Williams's related suit against Energy Transfer Chief Executive Kelcy Warren in a Texas court.

In its first-quarter release, Williams said its board is unanimously committed to enforcing its rights under the merger deal, while Energy Transfer didn't comment on the pending deal in its earnings report.

Over all, Williams Cos. reported a loss of $65 million, or 9 cents a share, compared with a year-earlier profit of $70 million, or 9 cents a share. Excluding one-time items, per-share earnings from continuing operations fell to 3 cents from 16 cents. Analysts polled by Thomson Reuters expected per-share profit of 22 cents

Energy Transfer Equity reported a profit of $312 million, or 30 cents a common unit, up from $284 million, or 26 cents a unit, a year earlier. The latest period included a tax benefit of $55 million. Revenue decreased 23% to $7.98 billion.

Analysts polled by Thomson Reuters expected per-unit profit of 29 cents and revenue of $10.28 billion.

Energy Transfer Partners reported a profit of $311 million, up from $281 million a year earlier. On a per-unit basis, which reflects general partner interests, the per-unit loss was 15 cents, compared with a year-earlier per-unit loss of 17 cents. Revenue slumped 56% to $4.48 billion.

Analysts expected per-unit profit of 26 cents and revenue of $7.58 billion.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

May 04, 2016 19:15 ET (23:15 GMT)

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