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Oneok (OKE) Up 4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Oneok Inc. (OKE - Free Report) . Shares have added about 4% 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's Earnings and Revenues Miss Estimates in Q4
ONEOK posted fourth-quarter 2020 operating earnings of 69 cents per share, missing the Zacks Consensus Estimate of 74 cents by 6.8%. Also, the bottom line declined 10.4% on a year-over-year basis.
Revenue Results
Total revenues of $2,570.6 million missed the Zacks Consensus Estimate of $2,909 million by 11.6%. Also, the top line dipped 3.5% from $2,663.6 million in the prior-year quarter due to fall in commodity sales, slightly offset by a rise in services revenues.
Highlights of the Release
The company spent $1,627.1 million on cost of sales and fuel, down 9.2% from the year-ago quarter’s level.
In the fourth quarter, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $742 million, up 12% year over year.
The company incurred interest expenses worth $176.9 million, up 36.9% from the prior-year quarter.
Its operating income of $538.7 million in the fourth quarter was up 11% from the prior-year quarter.
Financial Highlights
As of Dec 31, ONEOK had cash and cash equivalents worth $524.5 million compared with $21 million as of Dec 31, 2019.
Long-term debt (excluding current maturities) was $14,228.4 million as of Dec 31, 2020, up from $12,479.7 million as of Dec 31, 2019.
The company’s cash provided by operating activities in 2020 was $1,899.1 million, down from $1,946.8 million in 2019.
Capital expenditures (less allowance for equity funds used during construction) amounted to $2,195.4 million in 2020, down from $3,848.3 million in 2019.
Guidance
Natural Gas Liquids Raw Feed Throughput is expected to be 1,105-1,225 MBbl/d. The company anticipates Natural Gas Gathered and Natural Gas Processed to be 1,850-2,110 MMcf/d and 1,750-2,000 MMcf/d, respectively.
ONEOK projects 2021 net income and adjusted EBITDA in the range of $1,075-$1,375 million and $2,900-$3,200 million, respectively. Also, it expects earnings per share in the range of $2.40-$3.08. Growth capital expenditures are likely to be $335-$465 million in 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Oneok has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. Notably, Oneok has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Oneok (OKE) Up 4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Oneok Inc. (OKE - Free Report) . Shares have added about 4% 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's Earnings and Revenues Miss Estimates in Q4
ONEOK posted fourth-quarter 2020 operating earnings of 69 cents per share, missing the Zacks Consensus Estimate of 74 cents by 6.8%. Also, the bottom line declined 10.4% on a year-over-year basis.
Revenue Results
Total revenues of $2,570.6 million missed the Zacks Consensus Estimate of $2,909 million by 11.6%. Also, the top line dipped 3.5% from $2,663.6 million in the prior-year quarter due to fall in commodity sales, slightly offset by a rise in services revenues.
Highlights of the Release
The company spent $1,627.1 million on cost of sales and fuel, down 9.2% from the year-ago quarter’s level.
In the fourth quarter, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $742 million, up 12% year over year.
The company incurred interest expenses worth $176.9 million, up 36.9% from the prior-year quarter.
Its operating income of $538.7 million in the fourth quarter was up 11% from the prior-year quarter.
Financial Highlights
As of Dec 31, ONEOK had cash and cash equivalents worth $524.5 million compared with $21 million as of Dec 31, 2019.
Long-term debt (excluding current maturities) was $14,228.4 million as of Dec 31, 2020, up from $12,479.7 million as of Dec 31, 2019.
The company’s cash provided by operating activities in 2020 was $1,899.1 million, down from $1,946.8 million in 2019.
Capital expenditures (less allowance for equity funds used during construction) amounted to $2,195.4 million in 2020, down from $3,848.3 million in 2019.
Guidance
Natural Gas Liquids Raw Feed Throughput is expected to be 1,105-1,225 MBbl/d. The company anticipates Natural Gas Gathered and Natural Gas Processed to be 1,850-2,110 MMcf/d and 1,750-2,000 MMcf/d, respectively.
ONEOK projects 2021 net income and adjusted EBITDA in the range of $1,075-$1,375 million and $2,900-$3,200 million, respectively. Also, it expects earnings per share in the range of $2.40-$3.08. Growth capital expenditures are likely to be $335-$465 million in 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Oneok has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 indicates a downward shift. Notably, Oneok has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.