ONEOK Inc (OKE) Reports 5% Increase in Q3 2023 Net Income and 11% Increase in Adjusted EBITDA
ONEOK Inc (NYSE:OKE) reported a 5% increase in Q3 2023 net income to $454 million and an 11% increase in adjusted EBITDA to $1.001 billion.
The company also reported an 18% increase in Gulf Coast/Permian region NGL raw feed throughput volumes and a 12% increase in natural gas volumes processed.
ONEOK Inc (NYSE:OKE) increased its 2023 net income and adjusted EBITDA guidance midpoints by $120 million and $125 million, respectively.
The company completed the acquisition of Magellan Midstream Partners in September 2023.
ONEOK Inc (NYSE:OKE) announced on October 31, 2023, a 5% increase in its third quarter 2023 net income to $454 million, resulting in 99 cents per diluted share. The company also reported an 11% increase in adjusted EBITDA to $1.001 billion, which includes $123 million in transaction costs, $35 million of third-party fractionation costs, and a $40 million contribution from six days of the newly acquired refined products and crude business.
Financial Performance
ONEOK's third quarter 2023 net income and adjusted EBITDA increased primarily due to higher NGL volumes across ONEOKs operations, higher natural gas processing volumes in the Rocky Mountain and Mid-Continent regions, and increased transportation and storage services in the natural gas pipelines segment. The company's third quarter 2023 adjusted EBITDA would have exceeded $1.1 billion, excluding transaction costs and third-party fractionation costs, and partial earnings from the refined products and crude segment.
Business Segment Results
In the Natural Gas Liquids Segment, the company reported an increase in third quarter 2023 adjusted EBITDA, compared with the third quarter 2022, primarily reflecting a $76 million increase in exchange services due to higher volumes across the system. In the Natural Gas Gathering and Processing Segment, a $54 million increase from higher volumes due to increased producer activity in the Rocky Mountain and Mid-Continent regions was reported. The Natural Gas Pipelines Segment saw a $9 million increase in transportation and storage services.
2023 Financial Guidance Update
ONEOK Inc (NYSE:OKE) increased its 2023 net income and adjusted EBITDA guidance midpoints by $120 million and $125 million, respectively. The company cited volume strength across ONEOKs operations, higher average fee rates, and lower third-party NGL fractionation costs as the key drivers for the increase.
Acquisition of Magellan Midstream Partners
In September 2023, ONEOK completed the acquisition of Magellan Midstream Partners. The acquisition is expected to add significant free cash flow through primarily fee-based earnings from the new refined products and crude businesses and expected tax synergies.
Looking Ahead
ONEOK's increased scale, scope, and diversified operations are expected to create exceptional value for its stakeholders. The company remains focused on serving its enhanced customer base, operating responsibly, and fully integrating its businesses.
Explore the complete 8-K earnings release (here) from ONEOK Inc for further details.
This article first appeared on GuruFocus.
