ONEOK Partners, L.P.
) reported second-quarter 2014 earnings of 54 cents per unit,
missing the Zacks Consensus Estimate of 66 cents by 18.2%. On a
year-over-year basis, quarterly earnings decreased 12.9% primarily
due to higher cost of sales and fuel and an increase in the unit
Oneok Partners, L P - Earnings Surprise |
ONEOK Partners units dropped 1.4% on Aug 5 following the adverse
In the second quarter, ONEOK Partners' total revenues were $3,065.7
million, lagging the Zacks Consensus Estimate of $3,502 million by
12.5%. However, reported revenues increased 10.7% year over year,
primarily on the back of increased natural gas volumes gathered,
processed and sold, and higher natural gas liquids (NGL) volumes
sold due to the recently completed growth ventures.
In the quarter under review, ONEOK Partners' cost of sales and fuel
was $2,571.4 million, up 9.1% from $2,356.2 million a year ago.
Total operating expenses increased 27.4% year over year to $232.1
million, primarily due to higher operations and maintenance as well
as depreciation expenses.
The partnership reported an operating income of $262.2 million, up
14% from $230 million a year ago.
ONEOK Partners' adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) in the second quarter surged
14.5% year over year to $360.9 million.
In the reported quarter, the partnership's interest expense was $73
million compared with $57.5 million a year ago.
In the reported quarter, operating income at ONEOK Partners'
natural gas gathering and processing, natural gas pipelines and
natural gas liquids segments increased 19.9%, 16.9% and 11.4% year
over year, respectively.
In Jul 2014, the board of directors of ONEOK Partners increased the
second-quarter 2014 cash distribution by around 2% to 76 cents per
unit. The revised quarterly cash distribution will be paid on Aug
14, 2014, to unitholders of record as on Aug 4.
During the second quarter, ONEOK Partners completed a public
offering of around 13.9 million common units and accumulated
roughly $730 million from it. The partnership also issued
approximately 1.9 million common units during the quarter through
its at-the-market equity program.
In addition, the partnership increased the limit under its
commercial paper program to $1.7 billion from $1.2 billion.
As of Jun 30, 2014, ONEOK Partners had cash and cash equivalents of
$278 million versus $134.5 million as of Dec 31, 2013.
Long-term debt (excluding current maturities) as of Jun 30, 2014
was $6,041.6 million versus $6,044.9 million as of Dec 31, 2013.
In the first half of 2014, the partnership's cash flow from
operating activities was $534.1 million, higher than $383.5 million
in the year-ago period.
ONEOK Partners' capital expenditures in the first six months of
2014 were $792.4 million versus $924.8 million in the prior-year
In the quarter, the partnership's distributable cash flow (DCF) was
$272 million versus $251.9 million a year ago.
For 2014, ONEOK Partners reiterated its net income, adjusted EBITDA
and DCF guidance in the range of $975-$1,075 million, $1,565-$1,665
million and $1,150-$1,250 million, respectively.
The cash distribution is expected to increase 1.5 cents per unit
per quarter, subject to the board's approval.
Within a time span of 2010-2016, ONEOK Partners plans to invest
$7,000-$7,500 million under its capital-growth program, up around
$1,100 million from the previous estimate.
At the Peers
Access Midstream Partners, L.P. (
) reported second-quarter 2014 earnings of 18 cents per unit,
missing the Zacks Consensus Estimate by 33.3%.
Enterprise Products Partners L.P. (
) announced second-quarter 2014 earnings of 67 cents per unit,
missing the Zacks Consensus Estimate by 8.2%.
Targa Resources Partners LP (
) reported second-quarter 2014 earnings of 64 cents per unit,
surpassing the Zacks Consensus Estimate by 48.8%.
We appreciate ONEOK Partners' systematic investments in growth
projects backed by strong cash generation capacity. The
partnership's plan for several projects, including the new natural
gas processing plants and allied infrastructure in Oklahoma and
North Dakota, will enable it to meet increasing service demand from
customers. The scheduled completion of the projects will likely
boost the partnership's cash inflow in the future.
The partnership currently has a Zacks Rank #3 (Hold).
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ENTERPRISE PROD (EPD): Free Stock Analysis
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