Summary
ONEOK Inc.'s third-quarter 2012 report shows a net income of $165.0 million, a slight increase from $160.9 million in the same period of 2011. For the nine months ended September 30, 2012, net income rose to $547.7 million from $495.0 million in the prior year. Revenues decreased year-over-year due to lower natural gas and NGL prices, although volumes increased, particularly from ONEOK Partners' completed projects. The company's strategic focus on growth projects within its ONEOK Partners segment is evident, with significant capital expenditures dedicated to expanding natural gas gathering, processing, and NGL infrastructure. The Energy Services segment experienced a decline in net margin and revenues, attributed to lower commodity prices and reduced opportunities in storage and transportation, leading to a goodwill impairment charge. ONEOK strengthened its balance sheet through debt issuances in early 2012 and significant equity funding for ONEOK Partners, which also undertook its own debt issuance. The company continues its share repurchase program, having completed an accelerated share repurchase in September 2012. Despite pressures on the Energy Services segment, the overall financial performance demonstrates resilience, driven by the robust growth and fee-based earnings initiatives within ONEOK Partners. Investors should monitor the ongoing capital investments, commodity price fluctuations, and regulatory landscape, particularly concerning environmental and pipeline safety regulations.
Financial Highlights
51 data points| Revenue | $3.03B |
| Cost of Revenue | $2.47B |
| Gross Profit | $553.97M |
| Operating Expenses | $310.64M |
| Operating Income | $242.91M |
| Interest Expense | $71.36M |
| Net Income | $65.22M |
| EPS (Basic) | $0.32 |
| EPS (Diluted) | $0.31 |
| Shares Outstanding (Basic) | 205.00M |
| Shares Outstanding (Diluted) | 209.96M |
Key Highlights
- 1Net income for the three months ended September 30, 2012, increased to $165.0 million from $160.9 million in the prior year, while nine-month net income rose to $547.7 million from $495.0 million.
- 2Revenues decreased by 14% for the three-month period and 16% for the nine-month period due to lower natural gas and NGL prices, although volumes increased.
- 3ONEOK Partners continues to invest heavily in growth projects, with capital expenditures increasing by 35% for the three-month period and 44% for the nine-month period, primarily focused on natural gas gathering, processing, and NGL infrastructure.
- 4The Energy Services segment reported an operating loss of $21.8 million for the three-month period and $67.6 million for the nine-month period, significantly impacted by lower margins and a $10.3 million goodwill impairment charge.
- 5The company completed a $700 million senior notes issuance in January 2012 and ONEOK Partners completed a $1.3 billion senior notes issuance in September 2012, strengthening liquidity.
- 6ONEOK completed an accelerated share repurchase of approximately $150 million in September 2012 as part of its ongoing stock repurchase program.
- 7The company's Natural Gas Distribution segment saw a modest increase in net margin for the three-month period, but a slight decrease for the nine-month period, influenced by regulatory rate changes and customer volumes.