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.
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