Williams said Monday that its 2003 income was better than first reports last month because of adjusted earnings from its power business. The company said it recorded an additional $12 million, or 2 cents per share, in after-tax income for 2003.

It adjusted earnings for its power business segment to reflect an increase in revenues and segment profit of $20 million for net unrealized gains on certain derivative contracts. Williams’ revised results, however, still show a net loss of $492.2 million, or a loss of $1.01 per share.

UBS raised ratings on Williams Monday to Neutral 2 from Reduce 2, partly in response to an increase in forecasted natural gas prices to $4.90 for 2004.

“Notwithstanding the company’s ongoing successful restructuring efforts, we have long been critical of what we view as overly optimistic earnings projections on Williams and confusing [and] inconsistent guidance from management,” said UBS analyst Ronald J. Barone. “We reiterate that view today despite initial reductions in what we view as overly optimistic 2004-06 Street projections on the company.

“With that said, in line with out higher commodity price outlook and general modeling updating, we are incrementally raising our recurring 2004-06 EPS estimates on Williams” to 25 cents/share from 20 cents, which compares with a Street average of 37 cents and management guidance of 17-40 cents. Barone also raised the stock price target on Williams to $10/share from $8.50. WMB shares were up slightly Monday on the news to $9.44.

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