The 10-second takeaway
For the quarter ended June 30 (Q2), ONEOK beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share dropped to zero.
Margins contracted across the board.
ONEOK reported revenue of $3.35 billion. The four analysts polled by S&P Capital IQ predicted sales of $3.27 billion on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $2.53 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.34. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.29 per share. Non-GAAP EPS of $0.34 for Q2 were 17% higher than the prior-year quarter's $0.29 per share. GAAP EPS contracted to zero from the prior-year quarter's $0.29.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 7.5%, 610 basis points worse than the prior-year quarter. Operating margin was 3.8%, 540 basis points worse than the prior-year quarter. Net margin was 0.0%, 240 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.22 billion. On the bottom line, the average EPS estimate is $0.31.
Next year's average estimate for revenue is $15.92 billion. The average EPS estimate is $1.65.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 432 members out of 446 rating the stock outperform, and 14 members rating it underperform. Among 151 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 147 give ONEOK a green thumbs-up, and four 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 $53.25.
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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. The Motley Fool recommends ONEOK. Try any of our Foolish newsletter services free for 30 days. 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.