Williams Posts Solid EBITDA Growth Despite Higher Costs

Williams (NYSE: WMB) reported a 13% year-over-year increase in adjusted EBITDA to $1.92 billion for the third quarter of 2025, driven by new capacity on its Transco pipeline and higher Gulf of Mexico volumes. Despite the strong operational performance, higher financing and maintenance costs tempered net income growth, with GAAP earnings of $646 million, down from $728 million a year earlier.

Adjusted earnings per share rose 14% to $0.49, supported by higher service revenues and expanding midstream throughput across key basins. Cash flow from operations climbed 16% to $1.44 billion, and available funds from operations (AFFO) grew 13% to $1.45 billion, covering the dividend by 2.37x.

Segment performance:

• Transmission, Power & Gulf of Mexico EBITDA rose to $947 million, reflecting rate increases and new expansions including Transco’s Alabama Georgia Connector and Commonwealth Energy Connector, and Northwest Pipeline’s Stanfield South project.

• Northeast G&P generated $505 million, up from $493 million a year earlier on stronger Marcellus volumes.

• West EBITDA climbed to $367 million, driven by Haynesville and Permian growth, including contributions from the Louisiana Energy Gateway and Haynesville West expansions.

Williams’ operating and maintenance expenses increased to $583 million and interest expense rose to $372 million, reflecting inflationary pressure, higher activity levels, and capital spending to support long-term gas growth. The company’s leverage remains within its target range at 3.7x.

Williams reaffirmed its full-year 2025 adjusted EBITDA midpoint of $7.75 billion and raised growth capital expenditures by $500 million to between $3.95 and $4.25 billion, primarily due to its $1.9 billion investment in Woodside Energy’s Louisiana LNG project. The company maintained its dividend guidance of $2.00 per share, up 5.3% from 2024.

The midstream operator continued advancing its “wellhead-to-water” strategy, including expanded LNG partnerships, and increased its investment in the $2 billion Socrates power project. It also signed new precedent agreements for capacity expansions on Transco, Pine Prairie, and MountainWest pipelines to meet rising gas demand across the Southeast and Rockies regions.

The results underscore Williams’ position as a leading U.S. natural gas infrastructure provider, benefiting from strong demand for LNG feedgas and power generation, even as higher interest and maintenance expenses weigh on net profitability. The company’s pipeline network—spanning more than 32,000 miles—continues to play a central role in U.S. gas supply growth and energy security.

By Charles Kennedy for Oilprice.com

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