Electric Gains Lift MDU Resources’ Second-Quarter Profit
Operating margin widened to 12.8% as operating income outpaced revenue growth.
MDU Resources Group (MDU), the regulated energy-delivery company, reported that second-quarter net income rose 55.5% to $21.3 million, while diluted earnings increased to $0.10 a share from $0.07 a share.
The quarter marked a seasonal step down from the first quarter, with net income falling 73.6% and diluted earnings declining from $0.39 a share. Natural-gas distribution swung to a seasonal loss after contributing $44.2 million of first-quarter earnings.
Operating revenue rose 6.8% from a year earlier to $375.2 million, while operating income climbed 57.6%. Interest expense increased 24.0%, partly offsetting the operating improvement.
Electric-segment earnings rose 41.3% to $14.7 million and were roughly steady from the first quarter. The segment’s operating margin expanded to 17.7% from 11.4% as new and interim rates supplemented demand growth.
Electric retail volumes increased 8.2%, while retail-sales revenue rose 20.8% to $97.1 million. Growth extended across residential, commercial and industrial customers, and Badger Wind Farm contributed $3.3 million of earnings.
Natural-gas distribution narrowed its seasonal loss to $3.9 million from $7.4 million as new rates and 6.7% retail-volume growth outweighed higher interest expense. Lower average natural-gas costs helped reduce purchased-gas expense despite the higher retail demand.
Pipeline earnings declined 6.5% to $14.4 million as lower other income and higher depreciation offset increased short-term transportation revenue. Executed customer agreements for the proposed Bakken East project reached nearly 1.2 billion cubic feet a day, with an additional option that could cover nearly all the original open-season interest.
MDU reaffirmed its 2026 earnings guidance of $0.93 to $1.00 a share and retained its long-term objective of 6% to 8% annual earnings growth.
The company requested annual revenue increases of $34.5 million in a North Dakota electric rate case and $31 million in a federal pipeline rate case. It also signed an electric-service agreement for Applied Digital’s proposed 430-megawatt Polaris Forge 3 artificial-intelligence campus, subject to regulatory approval.