MDU Resources Group Inc. reported first quarter consolidated earnings of $42.8 million, or 23 cents per common share, compared to $41.6 million, or 22 cents per common share for the first quarter of 2010.
"We are off to a good start with earnings that are stronger than a year ago," said Terry D. Hildestad, president and chief executive officer of MDU Resources. "We increased our oil production even with weather challenges, and our utility and construction services businesses reported higher earnings. These improvements along with successful resolution of several open tax years, which reduced our tax expense, more than offset lower natural gas prices and the absence of earnings from Brazilian transmission assets sold last year.
"Overall, this was a successful quarter and earnings results exceeded our projection," he said. "We continue to focus on growth and plan to invest $565 million this year, with more than $300 million allocated to our E&P business where we are heavily focused on increasing oil production.
"Our financial strategy of the past several years is paying off. We have a strong balance sheet and good liquidity that can support this exploration and production growth, and at the same time positions all of our businesses to take advantage of the growth opportunities that we expect to occur in a recovering economy."
Poor weather affected the start of the construction season adding to the normal seasonal loss for the construction materials and contracting segment. Although the business continues to be affected by the weak housing market and lack of long-term federal highway funding, it is experiencing steady bidding opportunities. The work backlog at the end of the quarter increased to $569 million, including a harbor expansion project in California that is expected to get underway in the second quarter.
The construction-services segment experienced a quarter-to-quarter improvement, driven by increased workloads in the western region and continued strong equipment sales and rental. Revenues were $50 million higher, a 33 percent increase over last year. Backlog at the end of the quarter stood at $347 million.
"We are pursuing a variety of growth opportunities and are excited about the outlook," Hildestad said. "Excluding acquisitions, our plans include investing $3.5 billion over the next five years primarily for organic growth, a 27 percent increase over capital invested during the prior five-year period. We expect to fund these capital expenditures without having to issue external equity. And, we are pursuing growth through acquisitions, which would be incremental to this investment. We believe our long-term prospects are strong."