ONEOK, Inc. (OKE) Earnings & Analysis

Latest quarter

ONEOK reported Q2 FY2026 revenue of $12.0 billion, above the consensus estimate of $10.7 billion and up from $7.9 billion a year earlier. Adjusted earnings per share, as counted by the consensus, were $1.53, above the $1.39 estimate.

CEO Pierce Norton attributed the quarter’s results to natural gas liquids throughput, refined-products demand and volume growth across ONEOK’s systems. CFO Walt Hulse said adjusted EBITDA was $2.12 billion, up 7% from a year earlier, driven by volume growth and segment performance. He reported quarterly net income of $965 million.

ONEOK’s diluted EPS rose to $1.53 from $1.34 a year earlier. Its gross margin fell to 23.3% from 32.0%, while operating margin declined to 13.2% from 18.1%. ONEOK reported free cash flow of $1.4 billion, compared with $776.0 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On ONEOK’s Q2 call, CEO Pierce Norton said growth was coming from several sources across the company’s footprint, including production in the Permian, Mid-Continent and Powder River regions, LPG exports, LNG exports and domestic natural-gas demand. He said the connections among ONEOK’s businesses gave it opportunities to grow earnings and optimize assets across commodities and regions.

CFO Walt Hulse said producer activity was picking up and customers were positioning themselves for growth through 2026 and into 2027. He also pointed to refined-products volume growth toward the Gulf Coast, which he said could generate tariffs across the system. In natural gas liquids, Hulse said volumes had picked up from production previously shut in behind the system, mostly at third-party plants.

Discussing commodity prices, Hulse said ONEOK was well hedged in 2026 and therefore had not received a large benefit from the price increase that year. He expected the benefit to become more visible in 2027.

Asked about capital spending, Hulse said the project backlog was weighted toward midsize projects and that spending should moderate from its then-current levels. He said the company would continue to consider opportunities identified by its commercial team. Norton said the majority of expected growth was organic, including system optimization, synergies and expansion requiring little capital; he added that ONEOK would look for acquisition opportunities across its footprint.

Hulse said ONEOK expected approximately $2.6 billion in cumulative cash-tax benefits, compared with approximately $1.5 billion previously discussed. He said those benefits and existing tax attributes were expected to defer meaningful cash-tax payments until 2031. At the time of the call, he also expected earnings to follow the business’s normal seasonal pattern for the rest of 2026.

Guidance

In its October update, ONEOK raised its 2026 net-income guidance to $4.09 billion to $4.27 billion; on the Q2 call, CFO Walt Hulse had given a $3.6 billion midpoint. ONEOK raised its adjusted EBITDA range to $8.5 billion–$8.6 billion from $8.0 billion–$8.5 billion, and its diluted EPS midpoint to $6.30 from the $5.68 stated on the call.

ONEOK also said it expected approximately $3.5 billion in 2026 capital expenditures, compared with its previous $2.7 billion–$3.2 billion range.