Oneok Inc. (OKE): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


In the second quarter of 2014, ONEOK Inc.'s earnings per share missed the Zacks Consensus Estimate and decreased year over year, primarily due to increases in total operating expenses and shares outstanding. Topline improved year over year thanks to a rise in commodity sales and improved contribution from service operations. ONEOK Inc.'s subsidiary ONEOK Partners continues to contribute significantly to its top line and expected to act as catalyst for its future growth. Steady cash generating capacity, and strong project pipeline along with increasing capital spending level will likely boost the company's future cash inflow. We appreciate the company's effort towards maximizing shareholders' wealth through payment of regular dividends. However, stringent regulations and over-dependence on local distribution companies to supply energy are matters of concern. Thus, we are maintaining our Neutral recommendation.


Tulsa, OK-based ONEOK Inc., an energy company, engaged in natural gas and natural gas liquids (NGL) businesses. The company offers safe and reliable energy and services to its customers. ONEOK Inc. is the sole general partner and owner of 41.0% of ONEOK Partners L.P. (OKS), one of the largest publicly traded master limited partnerships.

Previously, ONEOK Inc.'s operations are divided into three reportable business segments: ONEOK Partners, Natural Gas Distribution and Energy Services.

On Mar 31, 2014, ONEOK Inc. completed accelerated wind down of its Energy Services business. In Jun 2013, the company announced its plan to terminate operations of its energy services segment.

In Jan 2014, ONEOK Inc. separated its Natural Gas Distribution business (Kansas Gas Service, Oklahoma Natural Gas and Texas Gas Service) and formed a newly independent entity called ONE Gas, Inc. In Jul 2013, ONEOK Inc. announced its plan to split its natural gas distribution business.

ONEOK Partners: The segment engages in gathering and processing of natural gas and gathering, transporting and fractionating NGL, primarily in the Mid-Continent and Rocky Mountain regions, which include the Anadarko Basin of Oklahoma, Fort Worth Basin of Texas, Hugoton and Central Kansas Uplift Basins of Kansas and the Williston Basin of Montana and North Dakota and the Powder River Basin of Wyoming.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: OKS , NGL , OKE

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