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The Gory Details of ONEOK's Earnings Miss

By Seth Jayson – Updated Apr 10, 2017 at 1:32PM

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Just the facts, Fool.

ONEOK (NYSE: OKE) reported earnings on April 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), ONEOK missed estimates on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue expanded. GAAP earnings per share dropped.

Margins shrank across the board.

Revenue details
ONEOK reported revenue of $3.54 billion. The four analysts polled by S&P Capital IQ expected revenue of $3.75 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.54. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.60 per share. GAAP EPS of $0.54 for Q1 were 6.9% lower than the prior-year quarter's $0.58 per share. (The prior-year quarter included $0.07 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 11.3%, 190 basis points worse than the prior-year quarter. Operating margin was 7.7%, 210 basis points worse than the prior-year quarter. Net margin was 3.2%, 40 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $3.23 billion. On the bottom line, the average EPS estimate is $0.33.

Next year's average estimate for revenue is $14.26 billion. The average EPS estimate is $1.80.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 420 members out of 436 rating the stock outperform, and 16 members rating it underperform. Among 154 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 149 give ONEOK a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ONEOK is outperform, with an average price target of $52.70.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends ONEOK. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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