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ONEOK's (OKE) Earnings Miss Estimates in Q2, Revenues Beat

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ONEOK Inc (OKE - Free Report) posted second-quarter 2020 operating earnings of 32 cents per share, which missed the Zacks Consensus Estimate of 50 cents by 36%. Also, the bottom line plunged 57.3% on a year-over-year basis.

Due to the negative impact of COVID-19 on demand and prices of crude oil, most E&P companies voluntarily ramped down production volumes. This, in turn, induced weak volumes in ONEOK’s pipeline, thereby impacting its results.

Revenue Results

Total revenues of $1,660.7 million surpassed the Zacks Consensus Estimate of $1,641 million by 1.2%. However, the top line declined 32.4% from $2,457.6 million in the prior-year quarter.

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

The company spent $940.5 million on cost of sales and fuel, down 42.1% from the year-ago quarter’s level.

In the second quarter, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $533.9 million, down 15.6% year over year.

The company incurred interest expenses of $219 million, up 86.4% from $117.5 million in the prior-year quarter.

The company’s operating income of $355.7 million in the second quarter was down 25.3% from $476.1 million in the prior-year quarter.

Financial Highlights

As of Jun 30, ONEOK had cash and cash equivalents worth $945.7 million compared with $21 million as of Dec 31, 2019.

Long-term debt (excluding current maturities) was $14,276.2 million as of Jun 30, 2020, up from $12,479.7 million as of Dec 31, 2019.

The company’s cash provided by operating activities at the end of the first half of 2020 was $736.4 million, down from $968 million at the end of first-half 2019.

Capital expenditures (less allowance for equity funds used during construction) amounted to $1,544 million at the end of first-half 2020, down from $1,720.2 million in the same period of 2019.

Guidance

For second-half 2020, ONEOK projects total capital expenditures between $300 and $400 million.

Zacks Rank

ONEOK carries a Zacks Rank #4 (Sell), currently.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Release

ONE Gas Inc. (OGS - Free Report) delivered second-quarter 2020 earnings of 48 cents per share, beating the Zacks Consensus Estimate of 45 cents by 6.7%.

Upcoming Releases

Sempra Energy (SRE - Free Report) is slated to release second-quarter 2020 earnings on Aug 5. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share is pegged at $1.66.

Atmos Energy Corporation (ATO - Free Report) is scheduled to release third-quarter fiscal 2020 results on Aug 5. The Zacks Consensus Estimate for the period’s earnings per share is pegged at 77 cents.

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