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ONEOK (OKE) Posts In-Line Q3 Earnings, Misses on Revenues
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ONEOK Inc. (OKE - Free Report) reported third-quarter 2019 operating earnings of 74 cents per share, in line with the Zacks Consensus Estimate. The bottom line dropped 1.3% on a year-over-year basis.
Notably, higher natural gas liquids (NGL) and natural gas volume, increase in average fee rates along with ramp-up in transportation services in the natural gas pipelines segment drove results. However, results were impacted by lower Mid-Continent NGL volumes as well as higher operating costs and depreciation expenses caused by operation expansion.
Total Revenues
Total revenues amounted to $2.26 billion, which missed the Zacks Consensus Estimate of $2.36 billion by 4.22%. The top line also declined 33.3% from $3.39 billion recorded in the prior-year quarter due to lower Commodity sales.
ONEOK spent $1.41 billion on cost of sales and fuel, down 44.8% from the year-ago quarter’s tally.
The company’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $649.8 million, down 0.1% year over year.
The company incurred interest expenses of $129.6 million, up from $122 million in the prior-year quarter. Operating income was $482.2 million, down 2.7% from $495.5 million recorded in the year-ago quarter.
On Oct, 2019, the company completed the 200-million cubic feet per day (MMcf/d) Demicks Lake I Natural Gas Processing Plant in the Williston Basin.
Financial Highlights
As of Sep 30, 2019, ONEOK had cash and cash equivalents of $673.3 million compared with $12 million as of Dec 31, 2018.
Long-term debt (excluding current maturities) amounted to $12,479.5 million as of Sep 30, up from $8,873.3 million as of Dec 31, 2018.
The company’s cash flow from operating activities in the first nine months of 2019 was $1,326.8 million, down from $1,516.5 million in the year-ago period.
Capital expenditures (less allowance for equity funds used during construction) amounted to $2,739.3 million in the first nine months of 2019, up from $1,309.7 million in the year-ago period.
Guidance
The company now expects 2019 net income in the range of $1,220-$1,330 million. The previous guidance was $1,140-$1,400 million.
ONEOK's adjusted EBITDA is expected in the range of $2,560-$2,640 million. The previous guidance was $2,500-$2,700 million.
For 2019, the company expects growth capital expenditures in the range of $3,515-$3,695 million and maintenance capital expenditures in the range of $185-$205 million.
ONE Gas (OGS - Free Report) reported third-quarter 2019 earnings of 33 cents per share, which lagged the Zacks Consensus Estimate of 34 cents by 2.94%.
Upcoming Releases
Sempra Energy (SRE - Free Report) is scheduled to release third-quarter 2019 results on Nov 1. The Zacks Consensus Estimate for earnings is pegged at $1.49.
Atmos Energy Corporation (ATO - Free Report) is lined up to release third-quarter 2019 results on Nov 7. The Zacks Consensus Estimate for earnings is at 48 cents.
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ONEOK (OKE) Posts In-Line Q3 Earnings, Misses on Revenues
ONEOK Inc. (OKE - Free Report) reported third-quarter 2019 operating earnings of 74 cents per share, in line with the Zacks Consensus Estimate. The bottom line dropped 1.3% on a year-over-year basis.
Notably, higher natural gas liquids (NGL) and natural gas volume, increase in average fee rates along with ramp-up in transportation services in the natural gas pipelines segment drove results. However, results were impacted by lower Mid-Continent NGL volumes as well as higher operating costs and depreciation expenses caused by operation expansion.
Total Revenues
Total revenues amounted to $2.26 billion, which missed the Zacks Consensus Estimate of $2.36 billion by 4.22%. The top line also declined 33.3% from $3.39 billion recorded in the prior-year quarter due to lower Commodity sales.
ONEOK, Inc. Price, Consensus and EPS Surprise
ONEOK, Inc. price-consensus-eps-surprise-chart | ONEOK, Inc. Quote
Highlights of the Release
ONEOK spent $1.41 billion on cost of sales and fuel, down 44.8% from the year-ago quarter’s tally.
The company’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $649.8 million, down 0.1% year over year.
The company incurred interest expenses of $129.6 million, up from $122 million in the prior-year quarter. Operating income was $482.2 million, down 2.7% from $495.5 million recorded in the year-ago quarter.
On Oct, 2019, the company completed the 200-million cubic feet per day (MMcf/d) Demicks Lake I Natural Gas Processing Plant in the Williston Basin.
Financial Highlights
As of Sep 30, 2019, ONEOK had cash and cash equivalents of $673.3 million compared with $12 million as of Dec 31, 2018.
Long-term debt (excluding current maturities) amounted to $12,479.5 million as of Sep 30, up from $8,873.3 million as of Dec 31, 2018.
The company’s cash flow from operating activities in the first nine months of 2019 was $1,326.8 million, down from $1,516.5 million in the year-ago period.
Capital expenditures (less allowance for equity funds used during construction) amounted to $2,739.3 million in the first nine months of 2019, up from $1,309.7 million in the year-ago period.
Guidance
The company now expects 2019 net income in the range of $1,220-$1,330 million. The previous guidance was $1,140-$1,400 million.
ONEOK's adjusted EBITDA is expected in the range of $2,560-$2,640 million. The previous guidance was $2,500-$2,700 million.
For 2019, the company expects growth capital expenditures in the range of $3,515-$3,695 million and maintenance capital expenditures in the range of $185-$205 million.
Zacks Rank
ONEOK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Release
ONE Gas (OGS - Free Report) reported third-quarter 2019 earnings of 33 cents per share, which lagged the Zacks Consensus Estimate of 34 cents by 2.94%.
Upcoming Releases
Sempra Energy (SRE - Free Report) is scheduled to release third-quarter 2019 results on Nov 1. The Zacks Consensus Estimate for earnings is pegged at $1.49.
Atmos Energy Corporation (ATO - Free Report) is lined up to release third-quarter 2019 results on Nov 7. The Zacks Consensus Estimate for earnings is at 48 cents.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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