|
Williams woes sink stock
|
 |
January 29, 2002: 5:20 p.m. ET
Final numbers delayed; company expects earnings to miss estimates.
|
NEW YORK (CNN/Money) - Shares of Williams Companies fell sharply Tuesday after the energy trader delayed its earnings report to assess the effect of obligations related to its 2001 spinoff of Williams Communications.
The energy also said it would take a fourth-quarter charge related to Enron's bankruptcy. In late-afternoon trade, the shares were down more than 21 percent.
Williams (WMB: down $5.36 to $18.78, Research, Estimates) said its earnings results would be delayed for the next few weeks while it analyzes the financial effect of contingent obligations it has related to Williams Communications' (WCG: down $0.29 to $1.34, Research, Estimates) $1.4 billion of debt and a lease agreement covering assets that cost $750 million.
Williams said the analysis of contingent obligations was the result of its of its plan, announced in December, to strengthen its balance sheet and restore investor confidence, in part by eliminating credit-rating and equity-price triggers in those financings that had them. Similar clauses in financial arrangements played a key role in the collapse of bankrupt energy-trading company Enron Corp.
The company now estimates its fourth-quarter earnings will come in at 34 cents a share, including a charge of about 12 cents a share for Enron-related credit exposure, compared with a year-earlier earnings of 89 cents per share. That would miss the 39-cent-a-share estimate of analysts surveyed by earnings tracker First Call.
While Williams is involved in the oil and gas exploration and production business, it is also involved in the energy marketing and trading business, which is the part of Enron's business that got the company into trouble.
Since Enron's collapse, Williams and other energy companies have been rushing to shore up their balance sheets.
In December, Dynegy Inc. (DYN: down $0.73 to $23.96, Research, Estimates) raised $494 million in a secondary stock offering, proceeds of which were earmarked for debt reduction in what it said was a partial response to Enron's troubles. And Calpine Corp. (CPN: down $1.03 to $11.01, Research, Estimates) in December sold $1 billion of convertible notes after its debt was downgraded to junk-bond status. 
Click here to send mail to Victoria Zunitch
|
|
|
|
|
|
|
