OKE Q2 Earnings Call Highlights Higher Guidance and Project Growth

OKE Raises 2026 Outlook Again

Chief financial officer Walter Hulse set 2026 midpoints of $3.6 billion for net income, $5.68 for diluted earnings per share and $8.35 billion for adjusted EBITDA. The EBITDA midpoint is $250 million above February’s original guidance.

ONEOK reported EPS of $1.53 per share, which beat the Zacks Consensus Estimate of $1.39. Revenues of $12.05 billion topped the $10.66 billion consensus mark.

Hulse said Natural Gas Pipelines and Refined Products and Crude were tracking toward the upper end of their original ranges. Capital spending remains $2.7-$3.2 billion, with expenditures moving toward the upper end.

ONEOK Builds a Visible Project Bridge

Chief operating officer Randy Lentz said the Denver refined-products expansion entered service Aug. 1, adding 35,000 barrels per day and a direct jet-fuel link to Denver International Airport.

In the Permian, Lentz kept 110 million cubic feet per day of Delaware Basin expansions on schedule for the third quarter. The Bighorn plant was upsized to 400 million cubic feet per day for mid-2027.

Lentz also kept Medford Phase 1 on track for the fourth quarter, with Phase 2 due in the first quarter of 2027. Cutter 2, a 120 million-cubic-feet-per-day Powder River plant, is scheduled for the first quarter of 2028.

OKE Leans on Volume as NGL Mix Softens

Chief commercial officer Sheridan Swords said NGL raw-feed throughput rose 7% year over year, refined-products shipments increased 8%, and gathering-and-processing volumes advanced across every region.

Swords explained that a heavier mix of lower-rate ethane relative to C3+ products pressured NGL margins. July volumes strengthened as the Waha-to-Katy spread narrowed and additional supply came onto the system.

Export visibility improved as ONEOK reached its 80% contracting threshold for 200,000 barrels per day of LPG export capacity. Swords also said Seabrook crude-export throughput rose 20% from the first quarter.

ONEOK Frames CapEx and Tax Benefits

Hulse raised expected cumulative cash-tax benefits to about $2.6 billion from $1.5 billion. He said the benefits should defer meaningful cash taxes until 2031, extending the runway by two years.

Asked by a Goldman Sachs analyst about growth spending, Hulse said annual capital investment should moderate toward $2 billion-$2.5 billion after the 2026 and 2027 completion cycle.

He described the backlog as mid-sized rather than dependent on projects exceeding $1 billion. Hulse also expects earnings-per-share growth to exceed EBITDA growth, with free cash flow supporting potential share repurchases.

OKE Q&A Tests Growth Assumptions

A Citi analyst pressed management on the long-term growth target. President and chief executive officer Pierce Norton pointed to Permian, Mid-Continent and Powder River growth, Bakken productivity, LPG exports, LNG demand and gas-fired generation.

A Wells Fargo analyst asked about Permian NGL capacity. Swords said West Texas LPG can handle up to 740,000 barrels per day, while more than 50,000 barrels per day of legacy EnLink volumes will migrate from late 2026 through 2028.

In a follow-up, the Goldman Sachs analyst asked about power and data centers. Swords said ONEOK secured a one-gigawatt gas-supply agreement requiring more than $100 million of capital, while two late-stage data-center discussions were taking longer than expected.

ONEOK Keeps Execution at the Center

Norton emphasized that most targeted growth comes from organic projects, system optimization and unused capacity. Bolt-on acquisitions remain optional rather than required for the outlook.

Management’s back-half priorities are project delivery, volume conversion and disciplined capital allocation. It also flagged narrower Waha-to-Katy spreads and NGL product-mix pressure as operating constraints.

OKE Rank and Style Scores Stay Mixed

OKE carries a Zacks Rank #3 (Hold), with a Value Score of B, Growth Score of C, Momentum Score of F and VGM Score of C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The profile combines favorable value with weaker momentum and middle-range growth and composite readings.

Style Scores complement the Zacks Rank over the same one- to three-month horizon. The stronger historical combination is a Zacks Rank #1 or Zacks Rank #2 (Buy) with an A or B score. OKE’s current signal is mixed, and its Zacks Rank can change as estimates are revised after the results.

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