Latest news with #NicoleKivisto
Yahoo
30-06-2025
- Business
- Yahoo
5 Must-Read Analyst Questions From MDU Resources's Q1 Earnings Call
MDU Resources' first quarter results showed a mix of strong revenue growth and lower-than-expected profitability, with management attributing performance to higher earnings in its Pipeline and Natural Gas Distribution segments. The company benefited from increased demand for natural gas transportation and storage, alongside rate relief in key utility markets and robust customer growth—particularly within its electric and natural gas service territories. CEO Nicole Kivisto noted that 'our Pipeline and Natural Gas Distribution segments grew earnings by 13.9% and 11.5% respectively, year-over-year, driving our solid first quarter performance.' However, higher operating and maintenance expenses, including outage-related costs, and lower returns on non-qualified benefit plan investments, weighed on overall profitability. Is now the time to buy MDU? Find out in our full research report (it's free). Revenue: $674.8 million vs analyst estimates of $653.1 million (14.7% year-on-year growth, 3.3% beat) EPS (GAAP): $0.40 vs analyst expectations of $0.47 (14.9% miss) Adjusted EBITDA: $167 million vs analyst estimates of $166.1 million (24.7% margin, 0.5% beat) EPS (GAAP) guidance for the full year is $0.93 at the midpoint, roughly in line with what analysts were expecting Operating Margin: 16.9%, in line with the same quarter last year Market Capitalization: $3.38 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Chris Ellinghaus (Siebert Williams Shank) asked about the accretiveness of capital light contracts for large customers. CEO Nicole Kivisto explained that these arrangements, especially at the Ellendale site, are immediately beneficial to earnings and spread transmission costs among customers. Chris Ellinghaus (Siebert Williams Shank) inquired about the impact of Bakken oil and gas dynamics. Kivisto and CFO Jason Vollmer responded that rising gas-to-oil ratios and industrial demand support long-term pipeline growth despite oil price fluctuations. Chris Ellinghaus (Siebert Williams Shank) raised concerns about housing starts and customer growth in Boise. Kivisto noted that Boise remains a higher-growth market relatively insulated from economic swings, supporting utility customer additions. Brian Russo (Jefferies) questioned why electric segment earnings fell despite higher volumes. Vollmer attributed it to increased operations and maintenance costs, data center ramp-up effects, and lower investment returns on benefit plans. Ryan Levine (Citi) pressed on progress for the Bakken East pipeline project and the role of tariffs. Vollmer stated that while tariffs may affect material costs, they are manageable within project planning and are not expected to derail the project. Looking forward, our analysts will closely watch (1) the ramp-up of additional data center capacity and its contribution to electric segment earnings, (2) regulatory progress and outcomes on pending rate cases in Montana, Wyoming, and Idaho, and (3) milestones in the Bakken East pipeline and Baker Storage expansion projects. The pace of infrastructure investment and execution on planned capital projects will also remain key areas of focus. MDU Resources currently trades at $16.71, down from $17.60 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
Yahoo
10-06-2025
- Business
- Yahoo
MDU Q1 Earnings Call: Revenue Growth Driven by Utility and Pipeline Expansion, Profit Lags Expectations
Energy and construction materials company MDU Resources (NYSE:MDU) announced better-than-expected revenue in Q1 CY2025, with sales up 14.7% year on year to $674.8 million. Its GAAP profit of $0.40 per share was 14.9% below analysts' consensus estimates. Is now the time to buy MDU? Find out in our full research report (it's free). Revenue: $674.8 million vs analyst estimates of $653.1 million (14.7% year-on-year growth, 3.3% beat) EPS (GAAP): $0.40 vs analyst expectations of $0.47 (14.9% miss) EPS (GAAP) guidance for the full year is $0.93 at the midpoint, roughly in line with what analysts were expecting Operating Margin: 16.9%, in line with the same quarter last year Market Capitalization: $3.44 billion MDU Resources' first quarter performance was shaped by growth in its Pipeline and Natural Gas Distribution segments, with both units posting double-digit year-over-year earnings increases. CEO Nicole Kivisto highlighted a 1.4% rise in retail utility customers and higher natural gas volumes supported by colder weather as key drivers. The company also benefited from rate relief in multiple states for its natural gas business. However, higher operation and maintenance expenses, including costs related to electric generating station outages and increased payroll, offset these gains. Management was quick to credit the 'dedication to our core strategy' for the quarter's results, while also noting the incremental contribution from data center loads in the electric segment. Looking ahead, MDU Resources' full-year outlook is anchored by expected customer and rate base growth in its utility businesses and continued momentum in its pipeline segment. Management reaffirmed its focus on 'operational excellence' and outlined plans for $3.1 billion in capital investments over the next five years. Kivisto stated, 'We believe we are well-positioned for growth into the future with anticipated capital investment of $3.1 billion over the next five years, 7% to 8% compound annual utility rate base growth and customer growth expected in the 1% to 2% range annually.' The company also emphasized the impact of new infrastructure projects and pending regulatory approvals as key factors for future performance. MDU Resources attributed first quarter results to customer growth, recent rate relief, and increased demand from large energy users, while also flagging higher costs and regulatory developments. Data center load expansion: The electric segment saw a significant increase in retail electric volumes, largely driven by 180 megawatts of data center capacity coming online, with additional phases expected to ramp up over the next several years. Rate relief in gas segment: The natural gas distribution business benefited from new multi-year rate orders in Washington and interim rates in Montana, supporting higher retail sales revenue and offsetting some of the impact from increased operating expenses. Pipeline segment growth: The pipeline business posted record first quarter earnings, supported by strategic expansion projects and heightened demand for both transportation and storage services, particularly from industrial and power generation customers. Capital-light customer strategy: Management's approach to serving large customers—especially data centers—utilized existing system capacity, minimizing the need for new capital expenditures and enabling immediate incremental earnings while sharing costs with retail customers. Wildfire and legislative developments: New wildfire prevention and liability limitation laws in three of MDU's four electric states add a layer of risk mitigation, providing greater certainty for operations and future investments. MDU Resources' management expects future performance to hinge on utility rate base growth, successful infrastructure investments, and customer additions, with regulatory and cost factors influencing results. Ongoing utility investment: The company plans $3.1 billion in capital investments over five years, targeting 7% to 8% annual utility rate base growth, which management expects will drive long-term earnings expansion and support its dividend policy. Pipeline development opportunities: MDU is advancing large pipeline projects, such as the Bakken East pipeline and Baker Storage Field expansion, but noted that these are contingent on customer commitments and regulatory approvals; management views these as potential incremental growth drivers not yet included in its capital plan. Regulatory and operational risks: Management cautioned that construction costs, tariffs, and timing of regulatory approvals could impact project economics and pace of execution. The company is also monitoring economic sensitivities in key service areas, including housing starts and industrial demand, which could influence customer growth. Going forward, our analysts will monitor (1) the pace of infrastructure investments—especially for pipeline and electric capacity expansions, (2) regulatory outcomes for pending rate cases and major project approvals, and (3) incremental progress in signing new large commercial or data center customers. Additionally, updates on the Bakken East pipeline and responses to changing economic or legislative conditions will be critical to assess MDU's growth trajectory. MDU Resources currently trades at a forward P/E ratio of 16.2×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
