) reported first-quarter 2013 earnings per share of 54 cents,
missing the Zacks Consensus Estimate by 4 cents. However,
quarterly earnings increased 5.9% year over year primarily on
higher natural gas volumes collected and processed and natural
gas liquids (NGL) volumes gathered in the Williston Basin.
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ONEOK Inc.'s revenues of $3.5 billion were 7.1% lower than the
Zacks Consensus Estimate. However, quarterly revenues increased
3.7% year over year.
First-Quarter Operating Statistics
ONEOK Inc.'s total operating expense increased 10% year over year
to $349.6 million due to a rise in cost of sales and fuel,
operations and maintenance expenses, and depreciation and
Operating income was $273.9 million, down 16% year over year.
Increase in revenues was more than offset by higher total
operating expenses. Operating margin was 7.7% compared with 9.5%
ONEOK Partners' operating income was $177.7 million, down 30.6%
year over year due to decrease in the natural gas liquids
business from lower optimization and marketing margins, and the
negative impact of ethane rejection. In addition, unfavorable
outcome from the natural gas gathering and processing business
due to lower realized NGL product prices and increase in
compression costs was also responsible for this decline.
Natural Gas Distribution:
Segmental operating income improved 1.8% year over year to $100.6
million due to higher rates in Oklahoma, Kansas and Texas, and
increase in transportation volumes for higher demand from the
weather-sensitive customers in Kansas.
The segment reported an operating loss of $4.4 million compared
with a loss of $30.7 million a year-ago. Minimization of loss was
primarily driven by improved storage and marketing margins from
higher realized seasonal price differentials and marketing
ONEOK Inc., on a stand-alone basis, ended the quarter with $551.3
million of commercial paper outstanding, $1.9 million in letters
of credit and $646.8 million available under the $1.2 billion
Cash and cash equivalents as of Mar 31, 2013 were $143.9 million
compared with $583.6 million as of Dec 31, 2012.
As of Mar 31, 2013, long-term debt was $6,513.3 million versus
$6,515.4 million as of Dec 31, 2012.
Cash provided by operating activities during the first three
months of 2013 was $471.5 million, higher than $426.1 million in
the year-ago comparable period.
Capital expenditures increased to $501.1 million from $348.4
million in the prior-year quarter due to a 58% year-over-year
rise in expenses at the company's subsidiary - ONEOK Partners.
ONEOK Inc. reaffirmed its net income guidance for 2013 in the
range of $350 million to $400 million.
The company also guided that subject to its board's approval it
will increase the quarterly dividend rate by 2 cents for Jul
Other Energy Company Releases
) is slated to release its first quarter earnings on May 2. The
Zacks Consensus Estimate is $1.02.
Chesapeake Utilities Corporation
) is slated to release its first quarter earnings on May 3. The
Zacks Consensus Estimate is $1.34.
South Jersey Industries Inc.
) is slated to release its first quarter earnings on May 6. The
Zacks Consensus Estimate is $1.71.
Despite an unfavorable performance in first-quarter 2013 due to
lower realized NGL product prices and considerably thinner NGL
location price differentials, we believe that the completion of
several projects along with a strong financial position will
boost ONEOK Inc.'s forthcoming results.
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, OK-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).