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ONEOK (OKE) Misses Q1 Earnings & Revenue Estimates

Zacks Equity Research
Updated

ONEOK Inc. OKE reported first-quarter 2016 operating earnings of 40 cents per share, missing the Zacks Consensus Estimate of 42 cents by 4.8%. Reported earnings, however, surged 37.9% year over year primarily backed by fee-based earnings growth at both the natural gas pipeline, and natural gas gathering and processing segments.

Total Revenues

ONEOK’s total revenue of $1,774.5 million fell short of the Zacks Consensus Estimate of $1,955 million by 9.2%. Revenues were also down 1.7% year over year.

Quarterly Highlights

In the quarter under review, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $441.6, up 37.8% year over year. The improvement was fuelled by an increase in volumes and higher fee-based earnings.

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In the first quarter, ONEOK Inc. spent nearly $1,195.7 million on cost of sales and fuel, down 11%.

Operating income came in at $311.4 million in the first quarter, up 58.6%.

The company incurred interest expenses of $118.2 million, up 22.1%.

Financial Condition

As of Mar 31, 2016, ONEOK had cash and cash equivalents of $137.2 million, compared with $97.6 million as of Dec 31, 2015. Long-term debt (excluding current maturities) was $8,320.5 million as of Mar 31, 2016, flat compared to the 2015-end level.

In the reported quarter, the company’s cash flow from operating activities was $229.5 million, up from $39.3 million in the year-ago quarter. Capital expenditures were $196.4 million, down from $343.8 million a year ago.

Peer Releases

ONE Gas, Inc. OGS reported first-quarter earnings of $1.22 per share, beating the Zacks Consensus Estimate of $1.18 by 3.4%.

National Fuel Gas Company’s NFG first-quarter earnings of 97 cents per share beat the Zacks Consensus Estimate of 96 cents by a penny.

ONEOK Partners, L.P. OKS reported first-quarter earnings of 52 cents per share, above the Zacks Consensus Estimate of 48 cents by 8.3%.

Zacks Rank

ONEOK currently has a Zacks Rank #3 (Hold).

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ONEOK INC (OKE): Free Stock Analysis Report
 
NATL FUEL GAS (NFG): Free Stock Analysis Report
 
ONEOK PARTNERS (OKS): Free Stock Analysis Report
 
ONE GAS INC (OGS): Free Stock Analysis Report
 
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Zacks Investment Research