Summary
ONEOK Inc. (OKE) reported a strong third quarter and first nine months of 2018, demonstrating significant year-over-year growth in both revenue and net income. Total revenues increased by 17% for the quarter and 13% for the nine-month period, driven by a substantial rise in commodity sales, partially offset by a decrease in services revenue. Net income saw an impressive jump of 89% for the quarter and 63% for the nine-month period, reaching $313.9 million and $862.1 million, respectively. This performance was largely fueled by increased optimization and marketing earnings in the Natural Gas Liquids segment due to wider price differentials, alongside volume growth in the Williston Basin and STACK/SCOOP areas across the Natural Gas Gathering and Processing and Natural Gas Liquids segments. The company continues to execute on its robust growth project pipeline, with significant capital expenditures directed towards expanding its midstream infrastructure, particularly in NGL transportation and processing. This strategic investment is supported by a strong contract structure, predominantly fee-based, and positions ONEOK to capitalize on increasing production and demand for natural gas and natural gas liquids. The company also successfully managed its debt, issuing new notes and repaying existing obligations, while maintaining compliance with its credit agreement covenants. The balance sheet remains solid, with growth in property, plant, and equipment reflecting ongoing investments.
Financial Highlights
51 data points| Revenue | $3.39B |
| Cost of Revenue | $2.56B |
| Gross Profit | $833.13M |
| Operating Income | $495.53M |
| Interest Expense | $121.91M |
| Net Income | $313.26M |
| EPS (Basic) | $0.76 |
| EPS (Diluted) | $0.75 |
| Shares Outstanding (Basic) | 412.12M |
| Shares Outstanding (Diluted) | 414.85M |
Key Highlights
- 1Strong revenue growth driven by commodity sales, with total revenues up 17% for the quarter and 13% for the nine-month period.
- 2Significant increase in net income, up 89% for the quarter and 63% for the nine-month period, reflecting improved operational performance and higher commodity prices.
- 3Robust expansion of capital growth projects, with $1.3 billion invested in the first nine months of 2018, primarily in Natural Gas Liquids and Gathering/Processing infrastructure.
- 4Natural Gas Liquids segment performance boosted by wider location price differentials and increased optimization/marketing earnings.
- 5Natural Gas Gathering and Processing segment saw volume growth in key basins like the Williston and STACK/SCOOP areas, driving higher earnings.
- 6Successful debt management, including issuance of $1.25 billion in senior unsecured notes and repayment of existing debt.
- 7Continued commitment to shareholder returns with a declared dividend of $0.855 per share, indicating confidence in ongoing operational performance and cash flow generation.