MDU Resources (MDU) Missed First Quarter Earnings Estimates, Year-over-Year Sales Increase

MDU Resources Group Inc. MDU reported operating earnings per share (EPS) of 16 cents in the first quarter of 2022, which missed Zacks’ consensus estimate of 17 cents by a penny. Net income also fell 38.5% from earnings of 26 cents per share a year earlier.

Total revenue

Total revenue was $1,416.6 million, up 15.4% from $1,227.9 million in the prior year quarter.

Electricity and Natural Gas Distribution and Regulated Pipeline operating revenue improved 25% from the year-ago quarter level to $553.5 million. Revenue from Unregulated Pipeline, Building Materials and Contracting, Construction Services and Other Segments increased 9.9% from the prior year quarter and stabilized at 863, $1 million.

MDU Resources Group, Inc. Price, Consensus, and EPS Surprise

MDU Resources Group, Inc. price-consensus-eps-surprise-chart | Quote from MDU Resources Group, Inc.

Release Highlights

Total operating expenses for the first quarter were $1,349.2 million, up 18.1% from $1,142.7 million in the prior year quarter, due to an 11.9% increase in operating and maintenance expenses as well as higher manufacturing costs.

Operating profit for the reported quarter decreased 20.9% year-over-year to $67.4 million.

MDU Resources interest expense of $25.3 million increased 8.1% from $23.4 million in the prior year quarter.

As of March 31, 2022, the construction services industry had a backlog of $1.67 billion, up 31% from $1.27 billion in the prior year quarter.

As of March 31, 2022, the building materials sector had an order backlog of $940 million, up 15% from $819 million year-over-year.

Financial Highlights

Cash and cash equivalents as of March 31, 2022 were $64.9 million compared to $54.2 million as of December 31, 2021.

Total debt was $2,848 million as of March 31, 2022, compared to $2,742 million as of December 31, 2021.

MDU Resources’ net cash provided by operating activities in the first three months of 2022 was $112.4 million, compared to $95.6 million in the prior year quarter.

Orientation

MDU Resources confirmed its 2022 earnings forecast in the range of $2.00 to $2.15 per share. This estimate is based on several assumptions, among which should be mentioned normal weather conditions for the remainder of 2022 and the continued addition of electricity and natural gas customers at a rate of 1% to 2% per year.

MDU Resources plans to invest $770 million in capital projects in 2022. The capital program is expected to be largely funded by operating cash flow of between $550 million and $600 million.

Zacks Rank

MDU Resources currently has a Zacks rank of No. 4 (sell). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming releases

Arrow SR is expected to announce its first quarter 2022 results on May 6 before the market opens. The Zacks consensus estimate for earnings is set at $3.08 per share.

Spire’s long-term earnings growth is projected at 5%. The Zacks consensus estimate for SR’s 2023 EPS suggests 11.3% year-over-year growth.

duke energy DUK is expected to release its first quarter 2022 results on May 9 before the market opens. The Zacks consensus estimate for EPS is pegged at $1.37.

Duke Energy’s long-term earnings growth is projected at 6.2%. The Zacks consensus estimate for DUK’s 2022 EPS points to 4.2% year-over-year growth.

Algonquin Power & Utilities AQN is expected to release its first quarter 2022 results on May 12 after market close. The Zacks consensus estimate for EPS is pegged at 23 cents.

Long-term (three to five years) earnings growth for Algonquin Power & Utilities is forecast at 8.1%. The Zacks consensus estimate for AQN’s 2022 EPS points to 5.6% year-over-year growth.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Sallie R. Loera