ONEOK Raises Outlook as Pipeline Earnings Accelerate
Revenue climbed 53% to $12.05 billion as commodity sales expanded.
ONEOK (OKE), the energy-infrastructure company, reported a 13% increase in second-quarter net income to $967 million as adjusted EBITDA rose 7% to $2.12 billion.
Earnings accelerated from the first quarter, when net income was $776 million and adjusted EBITDA was $2.00 billion. Still, both measures remained about 1% below their fourth-quarter levels.
Revenue rose from $7.89 billion a year earlier, driven by a 61% increase in commodity sales to $10.81 billion. Diluted earnings increased 14% to $1.53 a share.
Natural Gas Pipelines led the operating gains, with adjusted EBITDA rising 58% to $297 million. Much of the increase was due to $77 million in optimization and marketing gains tied to favorable Waha-to-Katy price differentials, while contracted capacity and utilization also increased.
Results elsewhere reflected slower volume growth and higher costs. Natural Gas Liquids adjusted EBITDA fell 2% to $659 million despite record raw-feed throughput, while Gathering and Processing adjusted EBITDA edged up 1% as higher volumes and realized prices were largely offset by operating expenses. Refined Products and Crude adjusted EBITDA rose 13% to $627 million.
Systemwide volume growth moderated from the first quarter, including NGL raw-feed throughput, refined-products shipments and natural-gas processing. Operating income nevertheless increased 11% to $1.59 billion, while operating costs climbed 17% to $823 million.
ONEOK now expects 2026 net income of about $3.60 billion at the midpoint, earnings of $5.68 a share and adjusted EBITDA of $8.35 billion, marking its second guidance increase of the year. The company kept its capital-spending forecast at $2.7 billion to $3.2 billion.
Second-quarter capital expenditures declined 18% to $613 million and fell from $864 million in the first quarter. First-half operating cash flow rose 23% to $2.99 billion, giving ONEOK stronger cash generation as it carried a higher full-year earnings outlook into the second half.