Summary
ONEOK Inc. (OKE) reported solid financial results for the first quarter of 2019, demonstrating resilience and strategic execution in a dynamic energy market. The company saw a significant increase in net income and operating income compared to the prior year, driven by volume growth across its key business segments, particularly in the Permian, Williston, and STACK/SCOOP areas. This growth was supported by substantial investments in capital projects, primarily focused on expanding natural gas gathering and processing and natural gas liquids infrastructure, which are largely secured by long-term, fee-based contracts. ONEOK's commitment to returning capital to shareholders is evident through its increased dividend payout, reflecting confidence in its ongoing performance and growth trajectory. The company's diversified operations across natural gas gathering and processing, natural gas liquids, and natural gas pipelines continue to provide stable cash flows, with a significant portion of its earnings being fee-based. While commodity price fluctuations pose a market risk, ONEOK's hedging strategies and the primarily fee-based nature of its contracts mitigate some of this exposure. The company's strong liquidity position and access to credit facilities provide the financial flexibility needed to fund its ambitious growth projects and meet its financial obligations, positioning it well for continued operational success and value creation for its shareholders.
Financial Highlights
49 data points| Revenue | $2.78B |
| Cost of Revenue | $1.96B |
| Gross Profit | $823.58M |
| Operating Income | $468.74M |
| Interest Expense | $115.42M |
| Net Income | $337.21M |
| EPS (Basic) | $0.82 |
| EPS (Diluted) | $0.81 |
| Shares Outstanding (Basic) | 412.91M |
| Shares Outstanding (Diluted) | 415.23M |
Key Highlights
- 1Net income available to common shareholders increased by 27% to $336.9 million, or $0.81 per diluted share, compared to $264.2 million, or $0.64 per diluted share, in the first quarter of 2018.
- 2Total revenues decreased by 10% to $2.78 billion, primarily due to lower commodity sales, though this was partially offset by a 9% increase in services revenue.
- 3Operating income grew by 12% to $468.7 million, reflecting strong performance across business segments, particularly driven by volume growth and higher optimization/marketing earnings in the Natural Gas Liquids segment.
- 4Capital expenditures significantly increased to $889.7 million from $264.5 million in the prior year, driven by investments in major growth projects across its segments, notably the Elk Creek and Arbuckle II pipelines.
- 5The company announced a dividend increase of 12% to $0.86 per share for the first quarter of 2019, signaling confidence in its financial health and future prospects.
- 6Adjusted EBITDA rose by 12% to $637.5 million, highlighting the company's operational efficiency and the growing contribution of its fee-based services.
- 7ONEOK maintains a strong liquidity position with $27.8 million in cash and cash equivalents and $2.5 billion in borrowing capacity under its credit agreement, supporting its extensive capital investment plans.