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ONEOK Inc (OKE) to Post Q4 Earnings: What's in the Cards?

Zacks Equity Research

ONEOK Inc. OKE is scheduled to report fourth-quarter 2016 earnings results on Feb 27, after the market closes. Last quarter, the company recorded a positive earnings surprise of 2.33%.

Let’s see how things are shaping up at the company prior to this announcement.

Factors to Consider

The company expects a sequential increase in natural gas gathered and processed volumes in fourth-quarter 2016 due to strong performance in its Bear Creek natural gas processing plant. Further, it was supported by increased well completions in the Williston Basin and Mid-Continent, specifically in the STACK play.

ONEOK’s long-term debt has increased consistently every year from $3,924 million in 2011 to $8,320.1 million at the end of third-quarter 2016. The company’s debt/capital ratio is 70.75%, considerably higher than the industry average of 46.41%. Additionally, the interest rate hike accounted by Fed official on Dec 2016, will further increase the capital costs of the company.
 
Earnings Whispers

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 47 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ONEOK, Inc. Price and EPS Surprise

 

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

Zacks Rank: ONEOK carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Ranks #1 (Strong Buy), 2 (Buy) and 3 have a significantly higher chance of beating earnings. Though the company has a favorable Zacks Rank, its 0.00% Earnings ESP complicates surprise prediction..

Stocks with Zacks Rank #4 or 5 (Sell-rated) should never be considered going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

A better-ranked stock from the Utility Gas distribution industry worth considering, as our model shows it has the right combination of elements to post an earnings beat this quarter:

Chesapeake Utilities Corporation CPK is slated to report earnings on Feb 28. It is has an Earnings ESP of +4.11% and carries a Zacks Rank #3.

Other stocks from the Utility sector worth considering include

Spark Energy SPKE is slated to report earnings on Mar 9. It is has an Earnings ESP of +14.43% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lumos Networks Corp. LMOS is slated to report earnings on Mar 6. It is has an Earnings ESP of +40.00% and carries a Zacks Rank #3.

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ONEOK, Inc. (OKE): Free Stock Analysis Report
 
Chesapeake Utilities Corporation (CPK): Free Stock Analysis Report
 
Lumos Networks Corp. (LMOS): Free Stock Analysis Report
 
Spark Energy, Inc. (SPKE): Free Stock Analysis Report
 
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