Stock under pressure: ONEOK, Inc. (NYSE: OKE)

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ONEOK, Inc. (NYSE: OKE) stock fell over 1.2% on October 30th, 2019 (as of 10:10 am GMT-4; Source: Google finance) after the company posted mixed results for the third quarter of FY 19 and revised the outlook for FY 19. OKE in the third quarter of FY 19 has reported the adjusted earnings per share of 74 cents, which is in line with the analysts’ estimates for the adjusted earnings per share of 74 cents, according to Zacks Consensus Estimate. The company had reported the adjusted revenue of $2.26 billion in the third quarter of FY 19, missing the analysts’ estimates for revenue by 4.22%.

The third quarter performance is driven mainly by natural gas liquids (NGL) and natural gas volume growth, higher average fee rates in the natural gas liquids segment and increased transportation services in the natural gas pipelines segment, compared with the third quarter 2018. For the third quarter, OKE posted net income of $309.2 million and the Adjusted EBITDA of $649.8 million.

For the full year 2019, the company expects net income to be in the range of $1,220 million to $1,330 million, compared to the range of $1,140 million to $1,400 million announced before. ONEOK’s adjusted EBITDA is expected to be in the range of $2,560 million to $2,640 million, compared to its previously announced forecasted range of $2,500 million to $2,700 million. Growth capital expenditures are expected to be in the range of $3,515 million to $3,695 million. Maintenance capital expenditures are expected to be in the range of $185 million to $205 million.

Further, OKE’s capital-growth projects is on, or is ahead of schedule. The company has recently completed the Demicks Lake I plant in the Williston Basin. OKE anticipate line fill activities to begin on the northern section of the Elk Creek NGL pipeline in November 2019 and expect a portion of the MB-4 fractionator in Mont Belvieu to be completed in the fourth quarter 2019

In addition, for fiscal 2020, the company expects earnings growth to be more than 20%, which will be on the back of the upcoming completion of critical ONEOK natural gas and NGL infrastructure, that includes the assets to help significantly reduce natural gas flaring in the Williston Basin. These projects will provide immediate earnings and volume uplift in 2020 and stable fee-based growth for years to come.

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