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ONEOK (OKE) Posts In-Line Q3 Earnings, Misses on Revenues

Zacks Equity Research

ONEOK Inc. OKE 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 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 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 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 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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