OKE earnings analysis
What we found in OKE's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
ONEOK delivered strong Q2 growth, with revenue up 52.8% year over year to $12.049 billion, operating income up $162 million to $1.593 billion, and diluted EPS up to $1.53 from $1.34. Growth was led by Natural Gas Pipelines and Refined Products & Crude, while cash generation improved materially in the first half. The principal offset is margin compression: calculated gross margin fell 8.7 percentage points year over year to 23.3%, reflecting the largely offsetting increase in commodity sales and fuel costs, while the balance sheet carries a $1.9 billion working-capital deficit and increased short-term financing use.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and EPS rose sharply
- Q2 revenue increased $4.162 billion year over year to $12.049 billion, while diluted EPS rose $0.19 to $1.53 and net income increased $114 million to $967 million. Sequentially, revenue rose from an implied $9.618 billion in Q1 to $12.049 billion in Q2, and EPS increased from an implied $1.22 to $1.53.
- Pipeline EBITDA was the principal growth driver
- Adjusted EBITDA increased $140 million year over year to $2.121 billion. Natural Gas Pipelines was the largest contributor, with segment adjusted EBITDA up $109 million to $297 million, driven by $77 million of higher optimization and marketing activity and $19 million of higher transportation services.
- Refined-products earnings and volumes advanced
- Refined Products & Crude adjusted EBITDA increased $70 million to $627 million, supported by $79 million of higher transportation and storage earnings and $48 million of higher crude marketing earnings. Refined-products volumes shipped rose to 1,629 MBbl/d from 1,503 MBbl/d.
- First-half cash generation strengthened
- Operating cash flow for the first six months increased $558 million year over year to $2.987 billion. Less $1.477 billion of six-month capital expenditures, implied first-half free cash flow was $1.510 billion, and operating cash flow exceeded dividends paid by $1.6 billion.
- Fee-based profile supports dividend growth
- Fee-based earnings are expected to comprise approximately 90% of 2026 consolidated earnings. The quarterly dividend was $1.07 per share, up 4% year over year, or $4.28 per share annualized.
- Large growth-project pipeline remains funded
- Management expects $2.7 billion-$3.2 billion of 2026 capital expenditures, including the $700 million Texas City Logistics export terminal and the $350 million Eiger Express Pipeline investment, each expected to be completed in 2028.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Margins compressed despite revenue growth
- Revenue growth was largely commodity-sales pass-through: commodity sales rose $4.088 billion to $10.814 billion while cost of sales and fuel rose $3.882 billion to $9.242 billion. As a result, calculated gross margin declined to 23.3% from 32.0% and operating margin fell to 13.2% from 18.1% year over year.
- NGL earnings declined amid higher costs
- Natural Gas Liquids adjusted EBITDA declined $14 million year over year to $659 million, as operating costs increased $18 million and transportation and storage earnings decreased $6 million. Management also cited $11 million from fewer product-price differentials captured within exchange services.
- Risk factors unchanged; funding needs remain material
- The filing states there were no material changes to Item 1A risk factors, but liquidity remains a key watchpoint: working capital was a $1.9 billion deficit at June 30, commercial paper outstanding was $899 million, and $600 million was drawn on the $1.2 billion term loan. The remaining term-loan capacity was fully drawn in July 2026.
- Powder Springs impairment and affiliate losses
- The company recorded a $60 million noncash impairment on its 50% Powder Springs investment in Q1 2026. In the Refined Products & Crude segment, adjusted EBITDA from unconsolidated affiliates declined $23 million in the first half, primarily due to Powder Springs losses.
- Capital-program and commodity-volatility exposure
- The $2.7 billion-$3.2 billion 2026 capital-spending plan requires substantial execution and financing. Six-month capital expenditures were already $1.477 billion, and the company cited geopolitical conditions in the Middle East as contributing to commodity-price volatility during the first half.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.53
- Gross margin
- 23.3%
- Operating margin
- 13.2%
- Segment
- Natural Gas Gathering & Processing: $1.878 billion of Q2 revenue before eliminations, versus $1.848 billion; adjusted EBITDA was $546 million versus $540 million.
- Segment
- Natural Gas Liquids: $4.593 billion of Q2 revenue before eliminations, versus $3.871 billion; adjusted EBITDA was $659 million versus $673 million.
- Segment
- Natural Gas Pipelines: $449 million of Q2 revenue before eliminations, versus $405 million; adjusted EBITDA was $297 million versus $188 million.
- Segment
- Refined Products & Crude: $7.134 billion of Q2 revenue before eliminations, versus $2.908 billion; adjusted EBITDA was $627 million versus $557 million.
What they said about what is next.
The 10-Q does not provide quantitative revenue or EPS guidance. It maintains expected 2026 capital expenditures of $2.7 billion-$3.2 billion; management expects approximately 90% of 2026 consolidated earnings to be fee-based.
The filing reads better than the one before it.
What came before.
- 10-Q · April 29, 2026
- ONEOK reported strong first-quarter 2026 results, with revenue reaching $9.62 billion, a significant increase of 20% compared to $8.04 billion in Q1 2025. However, diluted EPS was $1.23, which fell short of the $1.31…
- 10-K · February 24, 2026
- ONEOK completed the EnLink acquisition (issued 41 million shares with a fair value of $4.0 billion) and reported strong top-line growth in 2025 (Q4 revenue $9.07 billion; Q4 diluted EPS $1.55). The company remains…
- 10-Q · August 6, 2024
- ONEOK reported Q2 2024 revenue of $4,894 million and diluted EPS of $1.33, with operating income of $1,229 million (25.1% operating margin). Year-over-year profitability and equity earnings strengthened materially,…
- 10-K · February 27, 2024
- ONEOK completed the Magellan acquisition on September 25, 2023 (total consideration $14.1 billion) and materially diversified its asset base into refined products and crude while retaining a primarily fee-based…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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