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MDU Resources Reports Mixed Quarterly Results

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MDU Resources’ price movement

MDU Resources Group (MDU) has a market capitalization of $3.8 billion. The company’s YTD (year-to-date) price movement was falling until its 3Q15 earnings report.

After its 3Q15 earnings report, MDU rose by 1.8% to close at $19.20 per share as of November 2, 2015. Its price movements on a weekly, monthly, and YTD basis are 2.1%, 8.2%, and -15.9%, respectively.

Technically MDU has broken the support of its 20-day, 50-day, and 200-day moving averages throughout 2015. Currently, it’s trading at 1.4% above its 20-day moving average, 8.5% above its 50-day moving average, and -2.9% below its 200-day moving average.

The First Trust Utilities AlphaDEX ETF (FXU) invests 4.3% of its holdings in MDU Resources. The ETF tracks a tiered, equal-weighted index of US utility companies selected from the Russell 1000. The YTD price movement of FXU is -4.5% as of October 30, 2015.

Competitors of MDU Resources and their market capitalizations are:

  • Vulcan Materials Company (VMC) — $12.9 billion
  • Questar Corporation (STR) — $3.6 billion
  • NorthWestern Corporation (NWE) — $2.6 billion
  • Black Hills Corporation (BKH) — $2.1 billion
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Performance of MDU Resources in 3Q15

MDU Resources reported net revenue of $1,280.5 million in 3Q15, a rise of 5.5% when compared to net revenue of $1,213.2 million in 3Q14. Revenue from the electric and construction materials and contracting segments rose by 8.1% and 3.7%, respectively.

Revenue from the natural gas distribution and construction services segments fell by 7.0% and 21.2%, respectively, in 3Q15 as compared to 3Q14. Revenue from the company’s pipeline and energy segment rose to $121.9 million in 3Q15 as compared to $40.7 million in 3Q14.

MDU’s operating income fell by 7.7% in 3Q15 as compared to operating income in 3Q14. Its net income and EPS (earnings per share) fell to -$149.2 million and -$0.72 per share in 3Q15 as compared to net income and EPS of $102.1 million and $0.53 per share in 3Q14. Its debt-to-equity ratio rose to 0.91 in 3Q15 as compared to its debt-to-equity ratio of 0.69 in 3Q14.

In 3Q15, some of MDU Resources’ key activities were as follows:

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  • The company named Martin A. Fritz as president and CEO (chief executive officer) of WBI Holdings, its pipeline and energy services business.
  • The company entered into five purchase and sale agreements. One agreement, for the sale of oil and natural gas assets held by MDU’s subsidiary, Fidelity Exploration & Production Company, closed in October. The sale proceeds from these agreements and tax benefits will be ~$450 million.

The company declared the following dividends on its common and preferred stocks:

  • a dividend of 18.3 cents per share on its common stock
  • a dividend of $1.12-1/2 per share on its 4.50 percent Series Preferred stock
  • a dividend of $1.17-1/2 per share on its 4.70 percent Series Preferred stock
  • A dividend of $1.27-1/2 per share on its 5.10 percent Series Preferred stock

About MDU Resources

MDU Resources Group provides value-added natural resource products and related services that are essential to energy and transportation infrastructure, including regulated utilities and pipelines, exploration and production, and construction materials and services companies.

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