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MDU Resources (MDU) Beats on Q3 Earnings, Trims '16 View

OKE ATO MDU OGS

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MDU Resources Group Inc. (MDU - Free Report) reported third-quarter 2016 operating earnings of 45 cents per share, beating the Zacks Consensus Estimate of 43 cents by 4.7%.

The bottom line also surged 18.4% from the year-ago quarter figure of 38 cents primarily on the back of a 4.4% improvement in earnings at the Construction Materials and Services segment.

Earnings at the Construction segment were driven by lower expenses and increased construction activity in the Pacific and northwestern areas of the U.S.

Total Revenue

MDU Resources’ total revenue of $1,208.6 million missed the Zacks Consensus Estimate of $1,289.0 million by 6.2%. Revenues were, however, up 0.9% from $1,198.3 million in the prior-year quarter.

Quarterly Highlights

In the quarter under review, MDU Resources’ operating expenses amounted to $1,061.9 million, down 0.8% from $1,070.5 in the prior year quarter.

Operating income came in at $146.7 million in the third quarter, up 14.8%.

The company incurred interest expense of $22.3 million, compared with $22.4 million in the third quarter of 2015.

MDU RESOURCES Price, Consensus and EPS Surprise

 

Financial Condition

Total debt was $1,902 million as of Sep 30, 2016, down from $2,201 million as of Sep 30, 2015.

The company’s cash flow from operating activities as of Sep 30, 2016 was $276 million, down from $404 million in the year-ago period.

Guidance

MDU Resources has narrowed its 2016 earnings guidance from continuing operations to the range of $1.05 to $1.15 per common share from $1.00–$1.15 guided earlier.

The company projects long-term annual earnings growth of 5–8%. Capitalexpenditure in 2016 is estimated to be $354 million.

Peer Releases

ONE Gas, Inc.’s (OGS - Free Report) third-quarter earnings of 24 cents per share outpaced the Zacks Consensus Estimate of 19 cents by 26.3%.

ONEOK Inc. (OKE - Free Report) reported third-quarter 2016 operating earnings of 44 cents per share, outpacing the Zacks Consensus Estimate of 43 cents by 2.3%.

An Upcoming Peer Release

Atmos Energy Corporation (ATO - Free Report) is expected to report third-quarter results on Nov 9. The Zacks Consensus Estimate stands at 31 cents.

Zacks Rank

MDU Resources Group Inc. carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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