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ONEOK's (OKE) Earnings Beat Estimates in Q3, Revenues Miss

ONEOK Inc OKE posted third-quarter 2020 operating earnings of 70 cents per share, beating the Zacks Consensus Estimate of 59 cents by 18.6%. However, the bottom line declined 5.4% on a year-over-year basis.

With economic activities reviving, E&P companies started ramping up their production volumes. This, in turn, led to improving volumes in ONEOK’s pipeline, thereby aiding its results.

Revenue Results

Total revenues of $2,174.3 million missed the Zacks Consensus Estimate of $2,560 million by 15.1%. Also, the top line dipped 3.9% from $2,263.2 million in the prior-year quarter.

ONEOK, Inc. Price, Consensus and EPS Surprise

ONEOK, Inc. Price, Consensus and EPS Surprise

ONEOK, Inc. price-consensus-eps-surprise-chart | ONEOK, Inc. Quote

Highlights of the Release

The company spent $1,265.7 million on cost of sales and fuel, down 10.5% from the year-ago quarter’s level.

In the third quarter, ONEOK’s adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $747 million, up 15% year over year.

The company incurred interest expenses of $176.4 million, up 36.1% from $129.6 million in the prior-year quarter.

The company’s operating income of $550.4 million in the third quarter was up 14.2% from $482.2 million in the prior-year quarter.

Financial Highlights

As of Sep 30, ONEOK had cash and cash equivalents worth $447.1 million compared with $21 million as of Dec 31, 2019.

Long-term debt (excluding current maturities) was $14,249.3 million as of Sep 30, 2020, upfrom $12,479.7 million as of Dec 31, 2019.

The company’s cash provided by operating activities at the end of the first nine months of 2020 was $1,103.1 million, down from $1,326.8 million at the end of the first nine months of 2019.

Capital expenditures (less allowance for equity funds used during construction) amounted to $1,924 million at the end of the first nine months of 2020, down from $2,739.3 million in the same period of 2019.

Guidance

ONEOK projects 2020 net income and adjusted EBITDA in the range of $500-$900 million and $2,600-$3,000 million, respectively.

Zacks Rank

ONEOK carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

ONE Gas Inc. OGS is slated to release third-quarter 2020 earnings on Nov 2. The Zacks Consensus Estimate for the period’s earnings per share is pegged at 36 cents.

Sempra Energy SRE is slated to release third-quarter 2020 earnings on Nov 5. The Zacks Consensus Estimate for the period’s earnings per share is pegged at $1.47.

Atmos Energy Corporation ATO is scheduled to release fourth-quarter fiscal 2020 results on Nov 11. The Zacks Consensus Estimate for the period’s earnings per share is pegged at 52 cents.

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