Summary
ONEOK Inc. (OKE) reported a strong third quarter and first nine months of 2008, driven by robust performance in its ONEOK Partners segment. This segment benefited from wider NGL product price differentials, increased NGL gathering and fractionation volumes, and higher realized commodity prices, along with contributions from recently acquired assets. The company also saw positive impacts from new rate schedules in its regulated Distribution segment. Despite an increase in operating costs and depreciation and amortization, largely due to acquisitions and capital projects, the company's net margin and operating income significantly increased year-over-year. While the Energy Services segment experienced a decrease in net margin due to lower financial trading and retail margins, this was partially offset by gains in storage and marketing. The company also highlighted substantial investments in capital projects within the ONEOK Partners segment, aimed at expanding its NGL infrastructure.
Financial Highlights
31 data points| Revenue | $4.24B |
| Cost of Revenue | $3.78B |
| Gross Profit | $455.03M |
| Operating Expenses | $264.16M |
| Operating Income | $192.18M |
| Interest Expense | $61.18M |
| Net Income | $58.03M |
| EPS (Basic) | $0.28 |
| EPS (Diluted) | $0.28 |
| Shares Outstanding (Basic) | 208.89M |
| Shares Outstanding (Diluted) | 211.27M |
Key Highlights
- 1Net income for the three months ended September 30, 2008, was $58.0 million, a significant increase from $13.9 million in the prior year's period, translating to diluted EPS of $0.55 compared to $0.13.
- 2For the nine months ended September 30, 2008, net income was $243.7 million, up from $201.9 million in the same period of 2007, with diluted EPS rising to $2.30 from $1.83.
- 3Total revenues for the nine months increased to $13.3 billion from $9.5 billion in the prior year, driven by higher commodity prices and volumes across segments.
- 4The ONEOK Partners segment was the primary driver of growth, with net margin increasing by $111.5 million and $238.0 million for the three and nine-month periods, respectively, due to wider NGL differentials and higher commodity prices.
- 5Significant capital expenditures were made, totaling $1.03 billion for the nine months ended September 30, 2008, primarily for expansion projects in the ONEOK Partners segment, including the Overland Pass Pipeline and Arbuckle Pipeline.
- 6The company declared a quarterly dividend of $0.40 per share, an 11% increase year-over-year, and ONEOK Partners increased its cash distribution to $1.08 per unit.
- 7Liquidity remains strong, with significant credit facilities available, although the company noted increased borrowing under credit agreements in October 2008 due to tightening commercial paper market conditions.