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MDU Resources (MDU) Up 7% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for MDU Resources (MDU - Free Report) . Shares have added about 7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is MDU Resources 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.

MDU Resources Q3 Earnings Improve Y/Y, 2020 View Up

MDU Resources Group Inc. reported third-quarter 2020 operating earnings of 76 cents per share, which increased 11.8% from the year-ago level. This upside was led by strong performance of its construction companies and stable earnings from the regulated energy business.

Total Revenues

Total revenues for the third quarter were $1,587.2 million, up 1.5% from $1,563.8 million in the year-ago quarter.

Operating revenues in the electric, natural gas distribution and regulated pipeline inched up 0.3% from the prior-year quarter to $210.1 million. Revenues in non-regulated pipeline, construction materials and contracting, construction services, and other segments increased 1.7% from the year-ago quarter to $1,377.1 million.

Highlights of the Release

For the quarter under review, operating expenses of $1,214.1 million were up 0.1% from the prior-year period’s $1,212.6 million.

Operating income was $1383.6 million, up 0.7% year over year.

The company’s interest expenses of $23.8 million were down 5.9% from $25.3 million in the prior-year quarter.

As of Sep 30, 2020, the construction services business had a backlog of $1.28 billion, up 6.7% from $1.2 billion in the corresponding period of 2019.

The construction materials business had a backlog of $571 million, down from $747 million in the year-ago quarter.

Financial Highlights

Cash and Cash equivalents as of Sep 30, 2020 were $66.1 million compared with $66.5 million at 2019-end.

Long-term debt amounted to $2,268.7 million as of Sep 30, 2020 compared with $2,226.6 million on  Dec 31, 2019.

The company’s net cash provided by operating activities for the first nine months of 2020 was $481.8 million compared with net cash used in operating activities of $203.1 million in the comparable period of 2019.

Guidance

MDU Resources raised its 2020 earnings per share guidance to $1.80-$1.90 from the prior projection of $1.65-$1.85, with the current Zacks Consensus Estimate being $1.85.

Also, it now anticipates Construction services revenues in the range of $2.15-$2.25 billion (up from $1.90-$2.10 billion projected earlier) and construction materials revenues in the band of $2.20-$2.40 billion, with margins slightly higher than 2019.

 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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