MDU Resources Reports Stronger First Quarter Earnings From Continuing Operations

May 03, 2017

MDU Resources Group, Inc. (NYSE: MDU) today reported 12 percent higher first quarter earnings from continuing operations of $35.5 million, or 18 cents per share, compared to first quarter 2016 earnings from continuing operations of $31.6 million, or 16 cents per share.

Including discontinued operations, MDU Resources reported first quarter earnings of $37.2 million, or 19 cents per share, compared to $24.7 million, or 13 cents per share, in first quarter 2016.

Highlights from the first quarter include:

  • Electric and natural gas utility earnings increased 16 percent due to colder weather and continued execution of regulatory recovery efforts.
  • Pipeline and midstream business had a solid quarter; completed the sale of the Pronghorn assets.
  • Construction services’ earnings were up 23 percent on 17 percent revenue growth; backlog of $529 million.
  • Construction materials recorded a normal seasonal loss; backlog of $725 million.

“We are pleased with our solid first quarter results, and we are looking forward to the growth opportunities we see through the rest of the year,” said David L. Goodin, president and CEO of MDU Resources. “The 12 percent increase in earnings from continuing operations highlights the strength of our streamlined, two-platform businesses. Along with cost recovery efforts, higher electric and natural gas sales volumes helped drive higher earnings at our utility business, while weather slowed the seasonal start of our construction materials business. We are appreciative of the regulatory recovery granted by state agencies as we continue to enhance our delivery system for providing safe, reliable, low-cost electric and natural gas services to our 1.1 million utility customers.

“Our construction services business is off to a good start for the year, particularly with inside construction and industrial workloads, where earnings are up and backlog has remained consistent. While we have lower backlog at the construction materials business, primarily in the North Central Region, we continue to see a strong bidding environment in all regions. We are optimistic about the potential opportunities from infrastructure spending packages that have passed or are being considered within a number of states where this business operates, such as California, Idaho and Montana. On a federal level, we are anticipating more projects being bid from the five-year, $305-billion Fixing America's Surface Transportation Act,” Goodin said.

MDU Resources believes its regulated energy delivery and construction materials and services businesses are well-positioned for growth and will continue to play a key role in Building a Strong America®.

Business Unit Results

Regulated Energy Delivery

The electric and natural gas utility reported earnings of $42.2 million for first quarter 2017, up 16 percent compared to $36.3 million in 2016. The increase was driven mainly by 21 percent higher natural gas volumes and 6 percent higher electric volumes. Earnings were positively impacted by colder weather in jurisdictions where decoupling and weather normalization are not in place, and by cost recovery through regulatory relief. The utility continues to seek regulatory recovery for costs associated with upgrading and expanding facilities to meet customer demand.

First quarter 2017 earnings at the pipeline and midstream business were $3.9 million, compared to earnings of $5.3 million in 2016. The decrease reflects the absence of earnings from the previously announced Jan. 1 sale of the company’s interest in the Pronghorn assets. Customers continue to utilize the pipeline and midstream business’ natural gas storage services, with storage balances approximately 4 percent higher in the first quarter of 2017 compared to 2016.

Construction Materials and Services

The construction services business earned $7.4 million in the first quarter, up 23 percent from $6.0 million in 2016. The increase was mainly the result of higher inside construction workloads and margins in the Western and Central Regions, and increased industrial construction workloads and margins. Project backlog remains steady at $529 million at the end of first quarter 2017, compared to $530 million in 2016.

The construction materials business reported a seasonal first quarter loss of $19.9 million, compared to a loss of $14.5 million in 2016. This business saw a later construction start in most regions compared to last year as wet or snowy weather delayed work. Construction materials backlog at the end of first quarter was $725 million, compared to first quarter 2016’s record backlog of $831 million.

Discontinued Operations and Other

The results of MDU Resources’ former exploration and production and refining businesses have been reported as discontinued operations. The company has included in the “other” category any continuing results from these businesses, such as general and administrative costs and interest expense.

Earnings Per Share Guidance

The company reaffirmed its 2017 earnings per share guidance in the range of $1.10 to $1.25. “We are off to a good start this year,” Goodin said. “We have early momentum with our regulated businesses, and as we get into this year’s construction season, we will continue to provide updates to our estimates for 2017.”

Conference Call

The company will host a webcast at 10 a.m. EDT May 4 to discuss first quarter 2017 earnings results. The event can be accessed at Webcast and audio replays will be available. The dial-in number for audio replay, available through May 18, is 855-859-2056, or 404-537-3406 for international callers, conference ID 92678257.

About MDU Resources

MDU Resources Group, Inc., a member of the S&P MidCap 400 index and the S&P High-Yield Dividend Aristocrats index, is Building a Strong America® by providing essential products and services through its regulated energy delivery and construction materials and services businesses. For more information about MDU Resources, see the company’s website at or contact the Investor Relations Department at

Financial: Doran Schwartz, vice president and chief financial officer, 701-530-1750
Media: Laura Lueder, manager of communications and public relations, 701-530-1095