MDU Resources Group Inc. reported third-quarter consolidated earnings of $71.1 million, or 38 cents per share, excluding the effect of a noncash ceiling test write-down at its exploration and production group primarily related to lower natural gas prices. This is an earnings per share increase of 12 percent compared to third quarter 2011 earnings per share of 34 cents.
Comparative earnings were $63.8 million. Including the noncash write-down, the company reported a consolidated loss of $29.8 million, or 16 cents per share for third quarter 2012.
“We had a good quarter. With the strength of our diversified group of companies, we were able to generate solid earnings growth for the quarter even though we realized lower natural gas and oil prices than the prior year,” MDU Resources president and CEO Terry D. Hildestad said. “Our construction businesses continued to experience upward momentum increasing earnings by 36 percent over last year, and our utility business had another solid quarter driven in part by further growth in the Bakken.” Hildestad added, “We experienced some delays in planned drilling during the third quarter, however we are seeing strong recent results from wells coming on line late third quarter and so far in the fourth quarter. That positions us well to meet our oil production projected increase of 25 to 30 percent this year.”
The construction materials and services businesses had combined earnings of $51.8 million, an increase of $13.6 million over last year. Growth in construction workloads and margins, and improved volumes and margins in most material product lines, as well as higher equipment sales and rental margins, and the company's lower cost structure contributed to the earnings increase.
Revenues improved 6 percent and earnings 36 percent. This group has a backlog that is $55 million higher compared to a year earlier, and the mix of construction materials backlog has improved with private work now representing 17 percent, up from 8 percent a quarter earlier.
Hildestad noted that growth initiatives at the company's utility and pipeline segments are on track with the utility seeing solid customer growth driven by Bakken activity. “We are pleased with our improved results at our construction businesses. With the fourth quarter being a shoulder period for the construction materials business, how the weather holds out will be the key determining factor for results for the final months of this year. Weather was on our side in the fourth quarter a year ago. As we look beyond 2012 we see positive indicators for our construction businesses considering housing starts and construction activity are up, our backlog is higher and we have a new two-year federal highway bill in place,” Hildestad added.