ONEOK quarterly profit falls as pipeline divestiture impacts gas segment earnings

Core Insights - ONEOK reported a decline in fourth-quarter profit per share, primarily due to a significant drop in earnings from its natural gas transportation segment linked to the divestiture of an interstate pipeline network in 2024 [1][3]. Financial Performance - The company's earnings per share fell to $1.55 in the fourth quarter, down from $1.57 a year earlier [3]. - Adjusted quarterly core profit for the natural gas pipelines unit decreased to $261 million from $417 million year-over-year, with the pipeline divestiture accounting for a $264 million decline [3]. - Quarterly adjusted core profit for the refined products and crude segment dropped approximately 6% to $567 million [4]. - The natural gas liquids business saw a 4% increase in quarterly core profit compared to the previous year, while the natural gas gathering and processing segment recorded a 10% increase [4]. Market Conditions - The company faced challenges from low oil prices during the quarter, with benchmark Brent crude averaging $63.13 per barrel, down 11.3% from the previous year [2]. - Falling oil prices have pressured midstream service providers like ONEOK, leading to reduced pipeline transportation volumes as upstream drilling activity declines [2]. Future Outlook - ONEOK anticipates net income for the current year to be between $3.19 billion and $3.71 billion, with the midpoint falling below analysts' average estimate of $3.65 billion [4]. - The company has been diversifying its portfolio through acquisitions over the past two years, including a Gulf Coast NGL pipeline system and other midstream companies [5].