ONEOK Earnings Show Its Dividend Is Safe for Now
ONEOK (NYSE: OKE) reported its third-quarter earnings on Tuesday. The midstream operator's earnings rose both sequentially and year over year, driven by strong natural gas liquids volumes and lower costs. While the company's operational performance has improved significantly compared to the second quarter, the same can't be said about its balance sheet. Let's dive deeper into ONEOK's results to understand where the company and its stock could be headed.
The first thing that stands out in ONEOK's Q3 results are its natural gas liquids (NGL) volumes, which rose above pre-pandemic levels. NGL throughput volumes increased 7% compared to the year-ago quarter. The growth was driven by new plants connected to the company's systems, including its Demicks Lake II plant. While ONEOK's NGL volumes rose, its gas gathering and processing volumes fell year over year, partly due to production cuts in the Williston Basin in North Dakota.
ONEOK also did a great job in cutting its operational costs. It managed to reduce its costs by 16% compared to the third quarter of 2019. Examples of ONEOK's cost reduction efforts include idling plants temporarily where possible and reduced contract labor costs, as the company could manage the lower volumes with permanent employees.
Source Fool.com
