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Will ONEOK Inc. (OKE) Beat Earnings Estimates This Season?

Zacks Equity Research

ONEOK Inc. (OKE) will release its third-quarter 2014 financial results after the market closes on Nov 4, 2014. In the prior quarter, the company had reported a negative earnings surprise of 13.16%. Let’s see how things are shaping up for this announcement.

Factors to Consider this Quarter

ONEOK Partners, L.P. (OKS), a business segment of ONEOK Inc., usually increases its cash distribution rate once in a quarter. During the quarter, the company obtained a hike of around 2% from its previous payout from ONEOK Partners. This will likely boost ONEOK Inc.’s third-quarter 2014 results, as the company has significant ownership interest in ONEOK Partners.

A mild summer in 2014 is expected to impact natural gas demand negatively. Many U.S. utility companies utilize natural gas as fuel for power generation. Lower natural gas consumption will likely reduce midstream service volume. Therefore, ONEOK Inc.’s third-quarter earnings are expected to decline in the third quarter.

Earnings Whispers

Our proven model does not conclusively show that ONEOK Inc. is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here.

Zacks ESP: This is because the Most Accurate Estimate and the Zacks Consensus Estimate stand at 38 cents, resulting in an ESP of 0.00%.

Zacks Rank #3 (Hold): ONEOK Inc.’s Zacks Rank #3 when combined with a 0.00% ESP makes a surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated) going into the earnings release.

Other Stocks to Consider

Here are some firms in the same sector worth considering as our model shows they have the right combination of elements to post an earnings beat this quarter.

Delek Logistics Partners, LP (DKL) has an earnings ESP of +5.56% and carries a Zacks Rank #1 (Strong Buy).

Boardwalk Pipeline Partners, LP (BWP) has an earnings ESP of +9.09% and carries a Zacks Rank #3.

Read the Full Research Report on OKS
Read the Full Research Report on OKE
Read the Full Research Report on BWP
Read the Full Research Report on DKL


Zacks Investment Research