It has been about a month since the last earnings report for Oneok Inc. (OKE Quick QuoteOKE - Free Report) . Shares have added about 5.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Oneok due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

ONEOK Earnings and Revenues Miss Estimates in Q4

ONEOK Inc. reported fourth-quarter 2023 operating earnings per share (EPS) of $1.18 per share, which lagged the Zacks Consensus Estimate of $1.21 per share by 2.4%. However, the bottom line improved 9.2% from the year-ago quarter’s figure of 1.08.

OKE reported earnings of $5.48 per share for 2023 compared with $3.84 per share in 2022, which reflects a year-over-year increase of 42.7%.

Total Revenues

Operating revenues for the quarter totaled $5.2 billion, which missed the Zacks Consensus Estimate of $5.5 billion by 5.4%. However, the top line improved 4% from $5 billion in the prior-year quarter.

OKE reported total revenues of nearly $17.6 billion for 2023 compared with $22.3 billion in 2022, which reflects a year-over-year decrease of 21%.

Highlights of the Release

Adjusted EBITDA came in at $1.5 billion, up 56% year over year. Additionally, 2023 results included $465 million of adjusted EBITDA in the refined products and crude segment following the closing of the Magellan acquisition on Sep 25, 2023.

Operating income totaled $1.1 billion, up 45.3% from the prior-year quarter’s level of $756 million.

ONEOK incurred interest expenses of $305 million, up 83.7% from $166 million recorded in the year-ago period.

During the fourth quarter, total natural gas processed was 3,172 Billion British thermal units per day (BBtu/d), up 18.4% year over year.

OKE reported natural gas transportation capacity contracted of 7,920 million British thermal units per hour per day (MDth/d), up 4% year over year.

Financial Highlights 

As of Dec 31, 2023, ONEOK had cash and cash equivalents worth $338 million compared with $220 million as of Dec 31, 2022.

Long-term debt (excluding current maturities) totaled $21.1 billion as of Dec 31, 2023 compared with $12.7 billion as of Dec 31, 2022.

Cash provided by operating activities for 2023 amounted to $4.4 billion compared with $2.9 billion in the corresponding period of 2022.

2024 Guidance

ONEOK anticipates consolidated 2024 net income in the band of $2.6-$3 billion. It expects adjusted EBITDA in the range of $5.9-$6.3 billion.

Total capital expenditures are expected between $1.75 billion and $1.95 billion. Capital expenditure guidance includes the MB-6 NGL fractionator West Texas NGL pipeline expansion project and the expansion of the Elk Creek NGL pipeline, which will bring total capacity out of the Rocky Mountain region to 575,000 barrels per day.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, Oneok has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Oneok has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.