Summary
ONEOK Inc. reported its third-quarter 2019 financial results, showcasing resilience and strategic growth amidst fluctuating commodity prices. While total revenues saw a decrease year-over-year, primarily driven by lower commodity sales, the company's focus on fee-based services and ongoing capital projects positions it for future performance. The company continues to execute its expansion strategy across its Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments, with significant investments in infrastructure aimed at capturing growing production volumes from key basins. Despite a slight dip in operating income for the quarter, this was largely attributed to lower optimization and marketing earnings and unfavorable contract settlements in the prior year, partially offset by strong volume growth and higher fee rates in key operational areas. Net income remained robust, demonstrating the company's ability to manage costs and maintain profitability. ONEOK's strong liquidity position, bolstered by significant debt issuances and an undrawn credit facility, provides confidence in its ability to fund ongoing capital expenditures and shareholder distributions.
Financial Highlights
49 data points| Revenue | $2.26B |
| Cost of Revenue | $1.41B |
| Gross Profit | $848.70M |
| Operating Income | $482.15M |
| Interest Expense | $129.58M |
| Net Income | $309.15M |
| EPS (Basic) | $0.75 |
| EPS (Diluted) | $0.74 |
| Shares Outstanding (Basic) | 413.82M |
| Shares Outstanding (Diluted) | 415.58M |
Key Highlights
- 1ONEOK reported a net income of $309.2 million for the three months ended September 30, 2019, a slight decrease from $313.9 million in the prior year period, but showed a significant increase in net income for the nine-month period to $958.3 million from $862.1 million in the prior year.
- 2The company's fee-based business model continues to be a key strength, with approximately 85% of its consolidated earnings expected to be fee-based in 2019.
- 3Significant capital growth projects are underway across all segments, including expansions and new infrastructure in the Williston, Permian, Powder River, and DJ Basins, aimed at supporting increasing production volumes.
- 4The Natural Gas Liquids segment experienced a decrease in Adjusted EBITDA due to lower optimization and marketing earnings stemming from wider price differentials, partially offset by higher volumes and fee rates in other areas.
- 5The company successfully completed significant debt issuances in March and August 2019, raising $1.25 billion and $2.0 billion, respectively, to fund capital expenditures and general corporate purposes.
- 6ONEOK maintained strong liquidity with $673.3 million in cash and cash equivalents and $2.5 billion in borrowing capacity under its credit agreement as of September 30, 2019.
- 7Quarterly dividends on common stock continued to increase, with a declared dividend of $0.915 per share for November 2019, reflecting confidence in future cash flows.