ONEOK Inc. (OKE) reported fourth-quarter 2014 adjusted earnings of 45 cents per share, surpassing the Zacks Consensus Estimate of 37 cents by 21.6%.
Including marginal income from discontinued operations, the company's GAAP earnings in the fourth quarter came in line with the adjusted earnings. GAAP earnings in the prior-year quarter stood at 43 cents per share.
For 2014, adjusted earnings came in at $1.52 per share, missing the Zacks Consensus Estimate of $1.54 by 1.3%.
On a GAAP basis, the company reported earnings of $1.49 per share in 2014 versus $1.27 per share a year ago.
Total Revenue
In the quarter under review, ONEOK Inc.’s total revenue of $2.8 billion fell short of the Zacks Consensus Estimate by 16.5%. Quarterly top line decreased 17.5% year over year mainly due to a decline in commodity sales.
The company reported annual total revenue of around $12.2 billion, missing the Zacks Consensus Estimate by 2.9%. Total revenue in 2014 surged roughly 2.8% from $11.87 billion a year ago.
Quarterly Highlights
In the fourth quarter of 2014, ONEOK Inc. spent $2,281.3 million as cost of sales and fuel, down 24.2% from the prior-year level.
The company’s total operating expenses in the quarter were $261.8 million compared with $207 million a year ago. The 26.5% year-over-year surge was due to higher operations and maintenance expenses, and depreciation and amortization, and general taxes.
Operating income came in at $306.7 million in the fourth quarter, up 24.6% year over year mainly due to increases in natural gas volumes gathered, processed and sold as well as natural gas liquids volumes sold due to the completion of capital growth projects.
In the quarter, the company incurred $86.5 million as interest expenses, up 17.1% year over year.
Financial Condition
As of Dec 31, 2014, ONEOK Inc. had cash and cash equivalents of $172.8 million versus $145.6 million as of Dec 31, 2013.
The company’s long-term debt (excluding current maturities) was $7,192.9 million as of Dec 31, 2014 compared with $7,753.7 million as of Dec 31, 2013.
In 2014, the company’s cash flow from operating activities was $1,285.6 million, lower than $1,294.8 million in the year-ago period.
In the fourth quarter, capital expenditures were $574.8 million versus $658.8 million in the prior-year period.
Guidance
ONEOK Inc. decreased its guidance for 2015 net income to $317 million from the previous estimate of $393 million, considering the existing commodity price scenario.
The company also lowered its projection for cash flow available for dividends in 2015 to $570–$650 million, compared with the previously guided range of $580–$660 million.
At its Peers
MDU Resources Group Inc. (MDU) reported fourth-quarter 2014 earnings per share of 35 cents, missing the Zacks Consensus Estimate by 12.5%.
Zacks Rank
ONEOK Inc. currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the same sector include Chesapeake Utilities Corporation (CPK) and Northwest Natural Gas Company (NWN), both carrying a Zacks Rank #2 (Buy).
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