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MDU Q3 Earnings Miss Estimates on Higher Costs, Revenues Rise Y/Y

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Key Takeaways

  • MDU's Q3 earnings fell 11.1% to 8 cents per share, missing estimates by 20%, despite 10.4% revenue growth.
  • Higher operating and interest costs weighed on MDU's profits despite stronger electric sales and new rates.
  • MDU advances its $2.8-$3.1B Bakken East Pipeline project and reaffirms 2026 EPS guidance of 93 cents to $1.

MDU Resources Group, Inc. (MDU - Free Report) reported third-quarter 2026 adjusted earnings of 8 cents per share, missing the Zacks Consensus Estimate of 10 cents by 20%. The bottom line declined 11.1% from the year-ago quarter's adjusted earnings of 9 cents. 

Higher operating expenses and interest costs weighed on profitability despite improved electric utility performance.

Total Revenues of MDU

Operating revenues of $347.8 million beat the Zacks Consensus Estimate of $345 million by 0.81%. The top line increased 10.4% from $315.1 million in the year-ago quarter. Electric retail sales volumes increased 9.3%, supported by higher demand across customer classes.

MDU Resources Group, Inc. Price, Consensus and EPS Surprise

MDU Resources Group, Inc. Price, Consensus and EPS Surprise

MDU Resources Group, Inc. price-consensus-eps-surprise-chart | MDU Resources Group, Inc. Quote

MDU's Expense and Operating Income Trends

Total operating expenses were $300.2 million, up 9% from $275.3 million in the prior-year quarter. Operation and maintenance expenses increased 13.7% to $115.7 million, primarily reflecting higher payroll-related costs and expenses associated with the company's utility and pipeline operations. Electric fuel and purchased power costs increased 18% to $48.6 million. 

Operating income totaled $47.6 million, up 19.6% from $39.8 million in the year-ago quarter.

Interest expense increased 23.5% to $32.6 million, while other income declined to $1.4 million from $7.3 million.

New rates approved in North Dakota, Montana and Wyoming contributed $7.1 million in additional revenues. The Badger Wind Farm added $3.2 million to quarterly earnings.

Retail electric sales volumes increased 9.3%, aided by warmer weather and higher demand across customer classes. Sales to data center customers increased 18.4% year over year.

MDU Resources Advances Bakken East Pipeline

MDU Resources reached a positive final investment decision on the Bakken East Pipeline project on Sept. 30, 2026. The company narrowed its estimated investment range to $2.8-$3.1 billion from the previous $2.7-$3.2 billion.

The approximately 350-mile pipeline is designed to transport 1.4 billion cubic feet of natural gas daily. Construction is anticipated to begin in 2028, with the first phase targeted for completion in late 2029 and the second in late 2030.

The company is also pursuing opportunities from expanding data center demand. It has more than 1 gigawatt of contracted electric load, including 530 megawatts at Ellendale, ND, where 280 megawatts are already online.

MDU's Cash Flow and Balance Sheet Update

As of Sept. 30, 2026, total debt stood at $2.60 billion, while total equity was $2.97 billion. 

Net cash provided by operating activities totaled $347.6 million during the first nine months of 2026, down 11.5% from $392.8 million in the comparable period of 2025.

MDU Resources Reaffirms 2026 Guidance

MDU Resources reaffirmed its 2026 earnings guidance of 93 cents to $1 per share. The company continues to target long-term annual EPS growth of 6-8%.

The outlook assumes normal weather and operating conditions, continued utility customer growth of 1-2% annually and successful execution of approved capital investment and regulatory recovery plans.

Capital expenditures for 2026 are estimated at $594 million, excluding the other category, reflecting increased pipeline investments associated with the Bakken East project.

MDU’s Zacks Rank

MDU Resources currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Utility Releases

PPL Corporation (PPL - Free Report) is scheduled to report third-quarter 2026 results on Nov. 6, before the market opens. The Zacks Consensus Estimate for earnings is pegged at 53 cents per share, which implies year-over-year growth of 10.42%.

PPL’s dividend yield is 3.19%. The Zacks Consensus Estimate for third-quarter 2026 sales is pinned at $2.44 billion, which implies a year-over-year improvement of 8.91%.

NRG Energy, Inc. (NRG - Free Report) is set to report third-quarter 2026 results on Nov. 9, before the market opens. The Zacks Consensus Estimate for earnings is pegged at $3.44 per share, which implies year-over-year growth of 25.09%.

NRG’s dividend yield is 2.28%. The Zacks Consensus Estimate for third-quarter 2026 sales is pinned at $6.73 billion, which implies a year-over-year decline of 11.84%.

Consolidated Water (CWCO - Free Report) is scheduled to report third-quarter 2026 results on Nov. 9, after market close. The Zacks Consensus Estimate for earnings is pegged at 24 cents per share, which implies a year-over-year decline of 29.41%.

CWCO’s dividend yield is 2.04%. The Zacks Consensus Estimate for third-quarter 2026 sales is pinned at $32.62 million, which implies a year-over-year decrease of 7.12%.

 

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