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ONEOK's (OKE) Earnings Beat Estimates in Q1, Revenues Lag

ONEOK Inc. OKE posted first-quarter 2018 operating earnings of 64 cents per share, beating the Zacks Consensus Estimate of 62 cents by 3.32%. The figure improved 64% year over year.

Total Revenues

Total revenues were $3,102 million, which missed the Zacks Consensus Estimate of $3,490 million by 11.11%. Revenues jumped 12.8% from $2,750 million in the prior-year quarter.

ONEOK, Inc. Price, Consensus and EPS Surprise

ONEOK, Inc. Price, Consensus and EPS Surprise | ONEOK, Inc. Quote

Quarterly Highlights

The company spent $2,368 million on cost of sales and fuel, which rose 10.5% from the year-ago quarter.

In the first quarter, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $570.3 million, up 24% year over year.

The company incurred interest expenses of $115.7 million, down 0.6%. Operating income was $419.7 million in the first quarter, up 32.3%.

The quarterly results improved on the back of volume growth in the STACK & SCOOP areas along with increased optimization and marketing activities in the natural gas liquids segment.

Financial Highlights

As of Mar 31, 2018, ONEOK had cash and cash equivalents of $17.5 million, compared with $37.2 million as of Dec 31, 2017.

Long-term debt (excluding current maturities) was $7,091.8 million as of Mar 31, 2018, down from the Dec 31, 2017 level of $8,091.6 million.

The company’s cash flow from operating activities in the first quarter was $495.3 million, up from $269 million first quarter of 2017.

Capital expenditures (less allowance for equity funds used during construction) amounted to $264.5 million, up from $112.7 million in the year-ago period.

Guidance

For 2018, ONEOK reaffirmed adjusted EBITDA guidance in the range of $2,215-$2,415 million and net income in the range of $955-$1,155 million.

ONEOK expects its 2018 Capital expenditure in the range of $2,090-$2,480 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.

Upcoming Peer Release

South Jersey Industries, Inc. SJI is expected to report first-quarter 2018 results on May 8. The Zacks Consensus Estimate for earnings is pegged at 96 cents.

National Fuel Gas Company NFG is expected to report second-quarter fiscal 2018 results on May 3. The Zacks Consensus Estimate for earnings is pegged $1.06 per share.

Chesapeake Utilities Corporation CPK is expected to report first-quarter 2018 results on May 9. The Zacks Consensus Estimate for earnings is pegged at $1.34 per share.

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