Back to Headlines Print Version Buzz Up Stumble it Tweet it Facebook LinkedIn

Oneok 3Q Profit Falls 13%, But Co Boosts Year EPS View

DOW JONES NEWSWIRES

Oneok Inc.'s (OKE) third-quarter profit fell 13% on lower commodity prices, but the company said its 48%-owned Oneok Partners LP (OKS) unit benefited from the opening of new pipelines.

The parent company was also encouraged by the performance of its distribution and energy-services segments, leading it to raise its 2009 earnings guidance to $2.65 to $2.85 a share from the previous outlook of $2.40 to $2.75.

"Our energy services segment had a strong quarter, building on its solid second-quarter performance and benefiting from higher transportation margins and our continued efforts to reduce this segment's earnings volatility," said Oneok Chief Executive John W. Gibson. "The distribution segment also turned in a solid performance as a result of implementing new rate mechanisms.

The distributor of natural gas through utilities in Oklahoma, Kansas and Texas has been hurt by falling natural gas prices, though last quarter Gibson also noted improved transportation margins in the energy-services business, which includes marketing and storage.

For the latest quarter, Oneok reported a profit of $48 million, or 45 cents a share, compared with $58 million, or 55 cents a share, a year earlier. Revenue dropped 44% to $2.36 billion.

Analysts were looking for earnings of 23 cents on revenue of $3.74 billion, according to a poll by Thomson Reuters.

Gross margin surged to 19.1% from 10.7%.

Both the distribution and energy-services segments swung to a profit.

Oneok Partners, Oneok's gas-gathering and transportation affiliate, reported a profit of $121.5 million, or $1 a unit, down from $203.9 million, or $1.97 a unit, a year earlier. Revenue fell 30% to $1.56 billion.

Wall Street expected earnings of 87 cents on revenue of $1.86 billion.

Earnings fell 37% in both the natural-gas gathering and processing segment and the natural-gas liquids business, but the pipeline segment recorded a 25% increase.

For 2009, the partnership again narrowed its earnings guidance, this time toward the higher end of its prior forecast.

Shares of Oneok were up 0.7% at $37.20 in after-hours trading, while Oneok Partners was inactive after finishing at $54.62. Both companies remain well their March lows despite pulling back from recent 52-week highs.

-By Jay Miller, Dow Jones Newswires; 212-416-2355; jay.miller@dowjones.com

  (END) Dow Jones Newswires
  11-03-091655ET
  Copyright (c) 2009 Dow Jones & Company, Inc.