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Why Is MDU Resources (MDU) Up 4% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for MDU Resources (MDU). Shares have added about 4% in that time frame, outperforming 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 Q4 Earnings Lag Estimates, Revenues Up

MDU Resources delivered fourth-quarter 2018 operating earnings of 39 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 7.14%. Operating earnings fell 33.8% from the year-ago quarter’s level.

In 2018, the company posted operating earnings of $1.38 per share compared with $1.45 in 2017.

Total Revenues

Total revenues in the fourth quarter were $1,209.9 million, up 3.8% from $1,165.2 million in the year-ago quarter.

Operating revenues in the electric, natural gas distribution and regulated pipeline as well as the midstream segments fell 4.5% to $361.5 million. However, revenues in the non-regulated pipeline and midstream, construction materials and contracting, construction services and other segments increased 7.8% to $848.4 million.

In 2018, the company generated revenues of $4,531.6 million compared with $4,443.4 million in 2017.

Highlights of the Release

In the quarter under review, operating expenses amounted to $836.6 million, up 7.1% from the prior-year quarter’s figure of $781.1 million. The company incurred interest expenses of $22.4 million, up from $20.8 million in the prior-year quarter.

Operating income was $118.3 million, down 4.5% year over year.

As of Dec 31, the construction services business had backlog of $939 million, up 33% from the year-ago tally. The construction materials business had backlog of $706 million, up 45% from the prior-year figure.

Financial Highlights

Total debt amounted to $2,109 million as of Dec 31, 2018, up from $1,715 million as of Dec 21, 2017.  The company’s net cash flow from operating activities in 2018 was $499.9 million, up from $448 million in 2017.

Guidance

MDU Resources expects 2019 earnings per share in the range of $1.35-$1.55, whose mid-point of $1.45 is below the current Zacks Consensus Estimate for the period of $1.53.

The company plans to invest $ 2,659 million through 2019-2023.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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