Williams Cos. shares jumped nearly 8 percent on Thursday, the day after the natural gas producer and pipeline company announced plans to split in two.
Williams posted a higher-than-expected quarterly profit Thursday on strong prices for natural gas liquids, but Wall Street appeared to focus on the company's plan, announced after Wednesday's market close, to split its exploration and pipeline businesses into separate entities.
Analysts at Raymond James upgraded Williams shares to "outperform" from "market perform," saying the split will allow investors a sharper focus on the company's exploration and production business.
Analysts at Houston-based energy investment bank Tudor Pickering Holt said Williams' plan would put pressure on companies with similar structures, such as El Paso Corp, to follow suit.
Shares of El Paso climbed nearly 5 percent to $18.21 in afternoon trading on the New York Stock Exchange.
Williams reported a fourth-quarter profit of $174 million, or 29 cents per share, compared with $172 million, or 29 cents per share, a year earlier.
Excluding one-time items, earnings were 44 cents a share. On that basis, Wall Street analysts on average had expected 27 cents, according to Thomson Reuters I/B/E/S.
Shares of Tulsa-based Williams were up 7.6 percent at $29.88 on the NYSE.
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