It has been about a month since the last earnings report for MDU Resources (MDU). Shares have added about 3.1% 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 the most recent earnings report in order to get a better handle on the important catalysts.
MDU Resources' Q2 Earnings & Revenues Miss Estimates
MDU Resources reported second-quarter 2018 operating earnings of 22 cents per share, missing the Zacks Consensus Estimate of 28 cents by 21.43%. Operating earnings were in line with the year-ago quarter’s level.
Total revenues were $1,064.6 million, down 0.3% from $1,067.6 million in the year-ago quarter.
Highlights of the Release
In the quarter under review, operating expenses amounted to $990.6 million, up 0.2% from $988.9 million in the prior-year quarter.
Operating income was $74 million, down 6%.
The company incurred interest expense of $20.8 million, in line with the prior-year quarter’s level.
MDU Resources had a combined backlog of $1.62 billion of work in the construction services and construction materials businesses at the end of the second quarter.
Company’s operating revenues from the electric, natural gas distribution and regulated pipeline and midstream segment inched up 0.5% to $226.7 million. However, revenues from the non-regulated pipeline and midstream, construction materials and contracting, construction services and other segment fell 0.5% to $837.9 million.
Total debt was $1,853 million as of Jun 30, 2018, up from $1,761 million as of Jun 30, 2017.
The company’s net cash flow from operating activities at the end of Jun 30, 2018 was $176.6 million, up from $139.5 million at the end of Jun 30, 2017.
MDU Resources reaffirmed 2018 guidance for earnings per share (EPS) in the range of $1.25-$1.45.
The company plans to invest $672 million toward capital projects in 2018 and the consolidated capex plan for 2018 to 2022 period is $2,375 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 5.66% due to these changes.
At this time, MDU Resources has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, MDU Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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