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ONEOK Partners, L.P. (OKS - Analyst Report) has presented its full-year 2013 financial guidance. The net income of the partnership is expected to be in the range of $935 million to $1.015 billion in 2013, up 13% year over year from the band of $860 million to $910 million.

Apart from its net income forecast, ONEOK Partners also provided its full-year 2013 operating income, earnings before interest, taxes, depreciation and amortization (“EBITDA”), capital expenditure, and cash distribution guidance.
 
ONEOK Partners expects midpoint of its full-year 2013 operating income to increase to $1.027 billion from $0.948 billion as per 2012 guidance. As far as the partnership’s 2013 EBITDA is concerned, it is expected to be in the range of $1.36 billion to $1.48 billion versus current 2012 guidance midpoint of nearly $1.3 billion.

The partnership’s strong 2013 financial guidance has been primarily driven by an increase in anticipated natural gas gathering and processing volumes, along with higher natural gas liquids (“NGL”) gathering volumes from ONEOK Partners’ several growth projects. These positive factors might be partially offset by a decline in expected NGL optimization margins and lower-than-expected NGL price differentials in the partnership’s NGL segment.

In second-quarter 2012, ONEOK Partners reported mixed results due to positive NGL price differentials and higher NGL volumes gathered and fractionated related to recent expansion of Mid-Continent NGL gathering system. However, these were negatively impacted by a weak performance from Energy Services segment due to lower natural gas and NGL product prices.

The Zacks Consensus Estimates for third-quarter 2012, full-year 2012 and full-year 2013 are currently pegged at 71 cents, $2.97 and $2.69, per unit respectively.
 
We believe strong segment trend will continue in 2013, which will subsequently yield improved performance. ONEOK Partners’ intention to boost long-term unitholder value with a 2-cent-per-unit-per-quarter distribution increase, subject to approval; geographically diversified gas assets; rebalancing of capital structure and continuous investments in its several organic growth projects are expected to improve the partnership’s forthcoming financial performance.   

We know that ONEOK Partners strongly follows internal growth strategy. In 2011 - 2015, the partnership plans to invest $5.7 - $6.6 billion, including $2.5 billion as per full-year 2013 guidance, in several internal growth projects. ONEOK Partners expects its future growth to primarily come from the Bakken Shale and Three Forks in the Mid-Continent region. The partnership expects these facilities to provide a reliable and cost-effective means of transportation compared to other alternatives, which subsequently curtail ONEOK Partners’ cost of operation.

However, we are skeptical about chances of increase in interest expenses due to new debt issuance, uncertain weather condition, chances of volatile equity and credit markets and unpredictable commodity prices, which may significantly impact ONEOK Partners’ financial results in the future.

ONEOK Partners, L.P. currently retains a short term Zacks #3 Rank (Hold Rating).

Tulsa, Oklahoma-based ONEOK Partners, L.P. is one of the largest publicly traded master limited partnerships and a leader in gathering, processing, storing and transporting of natural gas in the U.S. The partnership competes with Plains All American Pipeline, L.P. (PAA - Analyst Report).
 

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