Summary
ONEOK Inc.'s first quarter 2017 results show a solid performance with a notable increase in total revenues, primarily driven by a significant rise in commodity sales. Net income saw a healthy increase of 6% year-over-year, reaching $186.2 million. Adjusted EBITDA also demonstrated growth, up 4% to $459.6 million, indicating strong operational performance across its segments. The company continues to benefit from its predominantly fee-based business model, with approximately 90% of earnings expected to be fee-based in 2017. The most significant strategic development highlighted is the pending acquisition of ONEOK Partners, L.P., announced in January 2017 and expected to close in the latter half of the year. This all-stock transaction aims to simplify the corporate structure and is expected to be accounted for as an equity transaction, with no immediate gain or loss recognized. The company also highlighted continued producer activity in key basins like STACK and SCOOP, which is expected to drive future volume growth.
Financial Highlights
48 data points| Revenue | $2.75B |
| Cost of Revenue | $2.14B |
| Gross Profit | $605.77M |
| Operating Income | $317.14M |
| Interest Expense | $116.46M |
| Net Income | $87.36M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.41 |
| Shares Outstanding (Basic) | 211.62M |
| Shares Outstanding (Diluted) | 213.60M |
Key Highlights
- 1Total revenues increased by 55% to $2.75 billion compared to the prior year's quarter, largely due to a 73% increase in commodity sales.
- 2Net income grew by 6% to $186.2 million, and diluted earnings per share remained consistent at $0.41.
- 3Adjusted EBITDA increased by 4% to $459.6 million, reflecting improved operational performance across segments.
- 4The company announced a significant merger transaction to acquire all outstanding common units of ONEOK Partners, L.P., expected to close in Q2 or Q3 2017.
- 5Capital expenditures decreased by 43% to $112.7 million, as major projects were placed in service in the prior year.
- 6The company's predominantly fee-based business model continues to drive stability, with approximately 90% of earnings expected to be fee-based in 2017.
- 7Significant growth in producer activity is anticipated in the STACK and SCOOP areas, supporting expected increases in natural gas and NGL volumes in the second half of 2017.