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Why Is MDU Resources (MDU) Up 0.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for MDU Resources (MDU - Free Report) . Shares have added about 0.5% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.

MDU Resources' Earnings and Revenues Rise Y/Y in Q3

MDU Resources delivered third-quarter 2019 operating earnings of 68 cents per share. Operating earnings increased 23.6% from the year-ago quarter’s level. The upside was driven by exceptional performance in construction materials and services businesses.

Total Revenues

Total revenues in the third quarter amounted to $1,563.8 million, up 22.1% from $1,280.8 million in the year-ago quarter.

Operating revenues in the electric, natural gas distribution and regulated pipeline as well as the midstream segments increased 4.4% to $209.4 million. Revenues in the non-regulated pipeline and midstream, construction materials and contracting, construction services as well as other segments increased 25.4% to $1,354.4 million.

Highlights of the Release

Under pipeline business, Demicks Lake project started operation as scheduled in September.

In the third quarter, operating expenses amounted to $1,374.3 million, up 20.5% from the prior-year quarter’s figure of $1,140.8 million.

Operating income amounted to $189.5 million, up 35.4% year over year.

The company incurred interest expenses of $25.2 million, up from $21 million in the prior-year quarter.

At the end of third quarter, the construction services business had backlog of $1.2 billion, up 34% from $896 million in third quarter of 2018.

At the end of third quarter, the construction materials business had backlog of $747 million, up 27% from $590 million in 2018.

Financial Highlights

Total debt amounted to $2,387 million as of Sep 30, up from $1,915 million as of Sep 30, 2018.

The company’s net cash provided by operating activities in the first nine months of 2019 was $203.1 million compared with net cash provided by operating activities of $317.4 million in the year-ago period.

Guidance

MDU Resources narrowed its previously provided guidance for 2019 earnings per share (EPS), which was forecast in the range of $1.45-$1.60. The company currently expects 2019 EPS in the range of $1.50-$1.60, whose mid-point of $1.55 is higher than the current Zacks Consensus Estimate of $1.50.


 

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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