) reported third-quarter 2013 adjusted earnings per share of 35
cents, surpassing the Zacks Consensus Estimate of 29 cents by
20.7%. On a year-over-year basis, earnings increased 12.9% due to
steady rise in natural gas and natural gas liquids ("NGL") volume
as a result of completion of several projects.
Excluding a non-cash after-tax charge of 5 cents at the Energy
Services segment, the company reported earnings from continuing
operations of 30 cents per share compared with 31 cents per share
in the prior-year quarter.
ONEOK Inc. reported revenues of $3,571.9 million, 3.6% above the
Zacks Consensus Estimate of $3,448 million. Quarterly revenues
also increased 17.9% year over year.
ONEOK Partners L.P.
) segment reported operating income of $240.1 million, down 3.3%
year over year. ONEOK Inc.'s another segment
Natural Gas Distribution
's operating income jumped 12.1% year over year to $17.6 million.
segment incurred a quarterly operating loss of $24.7 million
compared with a loss of $21.8 million in the year-ago quarter.
In the quarter under review, ONEOK Inc.'s total operating
expenses increased 6.6% year over year to $331.1 million due to
higher operations and maintenance expenses, and a rise in
depreciation expenses and general taxes.
The increase in revenues was more than offset by the rise in
total operating expenses. In the reported quarter, operating
margin contracted 6.4% from 8.0% in the year-ago quarter.
ONEOK Inc., on a stand-alone basis, ended the quarter with $515.3
million of commercial paper outstanding, $1.9 million in letters
of credit and $682.8 million available under the $1.2 billion
Cash and cash equivalents as of Sep 30, 2013 were $779.5 million
compared with $583.6 million as of Dec 31, 2012.
As of Sep 30, 2013 long-term debt was $7,757.2 million versus
$6,515.4 million as of Dec 31, 2012.
Cash provided by operating activities during the first nine
months of 2013 was $1,021.5 million, higher than $762.9 million
in the year-ago comparable period.
During the first nine months of 2013, ONEOK Inc. invested
$1,597.8 million in capital expenditure. A 29.0% rise in capital
expenditure was primarily due to investment in several projects
at the company's ONEOK Partners segment.
ONEOK Inc. narrowed its full-year 2013 net income guidance to
$245 - $275 million from the earlier projection of $235 - $285
million. This was due to lower-than-expected earnings from the
company's natural gas liquids ("NGL") business related to
narrower NGL location price differentials. In addition,
lower-than-anticipated non-cash charges related to the
accelerated wind down of the Energy Services segment also
propelled the company to revise its net income estimate.
ONEOK Inc. intends to increase its capital spending program for
the period 2010 - 2015 to $5.3 - $5.6 billion from the previous
estimate of $4.7 - $5.2 billion. This is due to an investment of
$305 million for the acquisition of the Sage Creek plant and
allied natural gas gathering and NGL infrastructure, and roughly
$135 million to upgrade and develop natural gas gathering and
processing related infrastructure, build new NGL pipeline
infrastructure and attach the Sage Creek natural gas processing
plant to the company's Bakken NGL Pipeline.
Other Company Releases
Chesapeake Utilities Corporation
) is slated to release its third-quarter earnings on Nov 7. The
Zacks Consensus Estimate is 37 cents.
South Jersey Industries, Inc.
) is slated to release its second quarter earnings on Nov 12. The
Zacks Consensus Estimate is 24 cents.
The company intends to streamline its existing operations. The
company announced its plan to terminate operations of the Energy
Services segment as part of its business realignment strategy. We
believe that the prolonged weak market conditions with no hope of
improvement in the near term and narrowed seasonal as well as
location natural gas price differentials have led to this
decision of terminating the segment.
In addition, ONEOK Inc. intends to split its natural gas
distribution business into a separate publicly traded company,
ONE Gas, Inc. The company's natural gas distribution business has
a proven record of stable performance. This initiative will
enable both the entities to redeploy funds as per their
priorities besides strengthening their presence in the region.
However, we are cautious about weak NGL pricing, stringent
utility regulations and volatile commodity prices, which may to
some extent, challenge the company's future performance.
Tulsa, Okla.-based ONEOK Inc. is a diversified energy company,
operating as a natural gas distributor primarily in the United
States. The company currently has a Zacks Rank #3 (Hold).
CHESAPEAKE UTIL (CPK): Free Stock Analysis
ONEOK INC (OKE): Free Stock Analysis Report
ONEOK PARTNERS (OKS): Free Stock Analysis
SOUTH JERSEY IN (SJI): Free Stock Analysis
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