Summary
ONEOK Inc. reported its second-quarter 2020 results, highlighting a challenging operating environment due to the COVID-19 pandemic and resulting energy market volatility. While total revenues and operating income declined compared to the prior year, the company demonstrated resilience through its predominantly fee-based business model, with over 90% of earnings expected to be fee-based in 2020. Significant impairment charges were recognized in the first half of the year, primarily impacting the Natural Gas Gathering and Processing segment, reflecting the market downturn. However, the company maintained strong liquidity through operational cash flows, a robust credit facility, and a recent equity issuance, positioning it to navigate the ongoing economic uncertainty and fund its operations and shareholder distributions. Looking ahead, ONEOK anticipates a gradual recovery in the second half of 2020, driven by the reopening of economies and improving commodity prices. The company has adjusted its capital expenditure plans, pausing or suspending several growth projects to preserve financial flexibility. Despite the headwinds, ONEOK continues to focus on safe and reliable operations, cost management, and delivering value to its shareholders, evidenced by its consistent dividend payments.
Financial Highlights
49 data points| Revenue | $1.66B |
| Cost of Revenue | $940.46M |
| Gross Profit | $720.27M |
| Operating Income | $355.73M |
| Interest Expense | $218.97M |
| Net Income | $134.05M |
| EPS (Basic) | $0.32 |
| EPS (Diluted) | $0.32 |
| Shares Outstanding (Basic) | 419.72M |
| Shares Outstanding (Diluted) | 420.12M |
Key Highlights
- 1Total revenues for the six months ended June 30, 2020, decreased by approximately $1.44 billion to $3.797 billion compared to $5.237 billion in the prior year period, primarily due to lower commodity sales.
- 2The company incurred significant non-cash impairment charges totaling $641.8 million in the first half of 2020, primarily related to goodwill, long-lived assets, and equity investments, impacting net income.
- 3Operating income for the six months ended June 30, 2020, decreased by $672.6 million to $272.3 million compared to $944.9 million in the prior year, impacted by impairment charges and lower commodity prices/volumes.
- 4Net income available to common shareholders for the six months ended June 30, 2020, was a loss of $8.1 million, a significant decrease from a net income of $648.6 million in the same period of 2019.
- 5The company maintained strong liquidity, ending the period with $945.7 million in cash and cash equivalents and having no outstanding borrowings under its $2.5 Billion Credit Agreement.
- 6ONEOK completed a significant equity issuance in June 2020, raising $937 million, which is expected to be used for general corporate purposes, including debt repayment and capital expenditures.
- 7Despite the challenging environment, ONEOK continued to pay its quarterly dividend of $0.935 per share.