Oneok (OKE) Up 3.5% Since Last Earnings Report: Can It Continue?

A month has passed since Oneok Inc.’s last earnings report. (OKE). Shares rose about 3.5% in that time, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Oneok facing a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the company’s most recent earnings report in order to better understand the important catalysts.

ONEOK’s first-quarter earnings and revenues are lower than estimates

ONEOK Inc. reported first-quarter 2024 operating earnings per share (EPS) of $1.09, up 3.5% from the Zacks Consensus Estimate of $1.13. The bottom line also declined 53.4% from $2.34 in the year-ago quarter.

Total revenues

Operating revenues for the quarter were $4.78 billion, representing a difference of 18.2% from the Zacks Consensus Estimate of $5.84 billion. However, revenue increased 5.8% from $4.52 billion in the year-ago quarter.

Release highlights

Adjusted EBITDA was $1.44 billion, down 16.8% year over year.

Operating income was $1.06 billion, down 28.9% from the prior-year quarter’s $1.5 billion level.

ONEOK incurred interest expense of $300 million, an increase of 80.7% compared to the $166 million recorded in the same period last year.

Total natural gas throughput was 2.894 billion British thermal units per day (BBtu/d), up 3.6% year-on-year.

The company’s reported contracted natural gas capacity of 8,086 million British thermal units per hour per day (MDth/d) increased 5.1% year-over-year.

Selected financial data

As of March 31, 2024, the company had cash and cash equivalents of $65 million, compared to $338 million as of December 31, 2023.

Long-term debt (excluding current maturities) was $20.4 billion at March 31, 2024, compared to $21.1 billion at December 31, 2023.

Cash from operations for the first three months of 2024 was $596 million, compared to $1.2 billion in the same period in 2023.

Guidelines 2024

ONEOK increased its 2024 consolidated net income to a range of $2.73 billion to $3.03 billion from the previous range of $2.6 billion to $3 billion. It now expects adjusted EBITDA in the range of $6.03 billion to $6.33 billion, compared to the previous range of $5.9 billion to $6.3 billion.

Total capital expenditures are expected to range from $1.75 billion to $1.95 billion.

How have estimates changed since then?

It turns out that estimate revisions have been trending upwards over the past month.

VGM results

Oneok currently has an average Growth Score of C, although it lags well behind its Momentum Score of F. However, the stock is rated a C on the value side, ranking in the middle 20%. investment strategy.

Overall, the stock has a Total VGM Score of D. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company generally show an upward trend, and the scale of these corrections looks promising. Notably, Oneok carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

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