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ONEOK (OKE) Q2 Earnings Beat Estimates, Revenues Miss

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ONEOK Inc. (OKE - Free Report) posted second-quarter 2018 operating earnings of 68 cents per share, beating the Zacks Consensus Estimate of 67 cents by 1.5%. The figure improved 106% on a year-over-year basis.

The upside can be attributed to increase in volume growth of natural gas and natural gas liquids in the STACK and SCOOP areas along with higher optimization and marketing activities in the Natural Gas Liquids segment.

Total Revenues

Total revenues were $2,960.5 million, which missed the Zacks Consensus Estimate of $3,203 million by 7.6%. Revenues jumped 8.6% from $2,725.8 million in the prior-year quarter.

Quarterly Highlights

The company spent $2,175.8 million on cost of sales and fuel, which increased 4% from the year-ago quarter’s tally.

In the second quarter, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $352.1 million, up 29% year over year.

The company incurred interest expenses of $113.5 million, down 4.2% from $118.5 million in the prior-year quarter. Operating income was $448.4 million in the second quarter, up 40.4% year over year.

ONEOK, Inc. Price, Consensus and EPS Surprise

Financial Highlights

As of Jun 30, 2018, ONEOK had cash and cash equivalents of $15.3 million compared with $37.2 million as of Dec 31, 2017.

Long-term debt (excluding current maturities) was $7,091.2 million as of Jun 30, 2018, down from $8,091.6 million as of Dec 31, 2017.

The company’s cash flow from operating activities at the end of Jun 30, 2018 was $1,003 million, up from $642.9 million at the end of Jun 30, 2017.

Capital expenditures (less allowance for equity funds used during construction) amounted to $615.3 million, up from $195.2 million in the year-ago period.

Guidance

For 2018, ONEOK raised net income guidance midpoint to $1,085 million from $1,055 million. The company also hiked adjusted EBITDA guidance midpoint to $2,350 million from $2,315 million.

Zacks Rank

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

Utility Releases

DTE Energy (DTE - Free Report) reported second-quarter 2018 operating earnings per share of $1.36, which outpaced the Zacks Consensus Estimate of $1.11 by 22.5%.

American Electric Power (AEP - Free Report) reported second-quarter 2018 adjusted earnings per share (EPS) of $1.01, beating the Zacks Consensus Estimate of 88 cents per share by 14.8%.

NextEra Energy (NEE - Free Report) reported second-quarter 2018 adjusted earnings of $2.11 per share, beating the Zacks Consensus Estimate of $2.07 by 1.93%

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