It has been about a month since the last earnings report for ONEOK, Inc.OKE . Shares have added about 9.6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is OKE due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ONEOK's Earnings Beat Estimates in Q1, Revenues Lag
ONEOK posted first-quarter 2018 operating earnings of 64 cents per share, beating the Zacks Consensus Estimate of 62 cents by 3.32%. The figure improved 64% year over year.
Total revenues were $3,102 million, which missed the Zacks Consensus Estimate of $3,490 million by 11.11%. Revenues jumped 12.8% from $2,750 million in the prior-year quarter.
The company spent $2,368 million on cost of sales and fuel, which rose 10.5% from the year-ago quarter.
In the first quarter, ONEOK's adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $570.3 million, up 24% year over year.
The company incurred interest expenses of $115.7 million, down 0.6%. Operating income was $419.7 million in the first quarter, up 32.3%.
The quarterly results improved on the back of volume growth in the STACK & SCOOP areas along with increased optimization and marketing activities in the natural gas liquids segment.
As of Mar 31, 2018, ONEOK had cash and cash equivalents of $17.5 million, compared with $37.2 million as of Dec 31, 2017.
Long-term debt (excluding current maturities) was $7,091.8 million as of Mar 31, 2018, down from the Dec 31, 2017 level of $8,091.6 million.
The company's cash flow from operating activities in the first quarter was $495.3 million, up from $269 million first quarter of 2017.
Capital expenditures (less allowance for equity funds used during construction) amounted to $264.5 million, up from $112.7 million in the year-ago period.
For 2018, ONEOK reaffirmed adjusted EBITDA guidance in the range of $2,215-$2,415 million and net income in the range of $955-$1,155 million.
ONEOK expects its 2018 Capital expenditure in the range of $2,090-$2,480 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter compared to one lower.
ONEOK, Inc. Price and Consensus
At this time, OKE has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks style scores indicate that the company's stock is suitable for growth and momentum investors.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, OKE has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.