We use cookies to improve your experience, analyze site usage, and show relevant ads. Go to our Privacy Policy for details.
The call highlighted strong commercial momentum (notably robust Bakken East open season interest and a large pipeline commitment), meaningful data center load under signed ESAs with a capital-light model benefiting retail customers, and continued regulatory progress and liquidity support. Offsetting these positives were weather-driven volume and earnings headwinds, a notable decline in pipeline segment earnings (~11%), and material execution and financing uncertainty tied to the large incremental Bakken East capex ($2.7B–$3.2B). Regulatory timing and cost volatility (steel, labor, compression) add risk to project economics and timing. On balance, the company reaffirmed guidance, emphasized a strong balance sheet and multiple financing options, and presented several growth opportunities, but also faces near-term operational and project execution risks.
Management reaffirmed 2026 EPS guidance of $0.93–$1.00 per share (Q1 was $80.8M or $0.39/sh, with ~ $0.03/sh headwind from milder weather) and reiterated a long‑term EPS growth target of 6%–8% and a targeted annual dividend payout ratio of 60%–70%. They said the current capital plan is $3.1 billion and disclosed a potential incremental Bakken East investment of $2.7B–$3.2B (design assumptions: ~353 miles of mainline, ~21 miles of laterals, three new compressor stations plus compression at three existing stations), backed by ~1.4 Bcf/d of open‑season interest (≈40% under precedent agreements, including a $50M/year × 10‑year firm commitment from North Dakota), with a planned FERC Section 7 filing target in Q3 and in‑service timing in late 2029–2030. Other quantified updates included 580 MW of signed data‑center ESAs (180 MW online; 50 MW online from the second center, 50 MW ramping, +150 MW later this year, +100 MW in 2027, +50 MW in 2028), an average retail customer bill credit of ≈$70/year today (potentially >$200/year when fully online), combined utility customer growth of 1.4% YoY (target 1%–2%), and the company remains open to financing via balance‑sheet, partnerships or other structures.
Q1 2026 earnings of $80.8 million, or $0.39 per share, compared to Q1 2025 earnings of $82.0 million, or $0.40 per share (consolidated EPS decline of ~2.5%; total earnings decline of ~1.5%). Company affirmed full-year 2026 EPS guidance of $0.93 to $1.00 and reiterated long-term EPS growth target of 6%–8% and targeted dividend payout ratio of 60%–70%.
Binding open season produced ~1.4 billion cubic feet per day (Bcf/d) of interest; ~40% of that interest is under signed precedent agreements (~0.56 Bcf/d signed). Included in signed agreements is a firm $50 million annual commitment for 10 years from the state of North Dakota. Project design estimates released and projected incremental capex range of $2.7 billion to $3.2 billion (would be incremental to existing $3.1 billion capital forecast).
580 megawatts under signed electric service agreements (ESAs). 180 MW online since mid-2023 (~31% of signed MW); additional 50 MW online and 50 MW ramping; 150 MW expected later in 2026 (~26% of signed MW), 100 MW in 2027 (~17%), and 50 MW in 2028 (~9%). Current capital-light approach yields an approximate $70/year bill credit for average retail customer today, with potential to increase to over $200/year when all volumes are fully online.
Wyoming electric rate case approved effective April 1, 2026; Montana interim rates approved for an annual $10.4 million increase effective April 1 (subject to refund); Idaho gas rates effective January 1 added ~$13 million annually; Washington year-two rates added ~$10.8 million effective March 1. FERC Section 7(c) application filed in March for Align Section 32 expansion (~$70 million capex included in $3.1 billion plan).
Combined utility retail customer growth of 1.4% year-over-year, within the company's target band of 1%–2%, supporting customer-driven growth projects and long-term EPS growth objectives.
Company reports a strong balance sheet and ample access to working capital. In March 2026, 4.3 million new common shares were issued from forward sale settlements for proceeds of approximately $81.3 million, enhancing liquidity. Management indicates all financing options are being considered for large projects (balance-sheet financing, partnerships, and other structures).
Hello, everyone. Thank you for joining us, and welcome to the MDU Resources Group, Inc. Q1 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. I will now hand the conference over to Brent Miller, Treasurer. Brent, please go ahead.
Thank you, Operator, and welcome everyone to the MDU Resources Group, Inc. First Quarter 2026 Earnings Conference Call. Our earnings release and supporting materials for this call are available on our website at mdu.com under the Investors section. Leading today's call are Nicole A. Kivisto, President and Chief Executive Officer, and Jason L. Vollmer, Chief Financial Officer of MDU Resources Group, Inc. During today's call, we will make certain forward-looking statements within the meaning of the federal securities laws. Please refer to our SEC filings for a discussion of risks and uncertainties that could cause actual results to differ.
I will now turn the call over to Nicole for her prepared remarks. Nicole?
Thank you, Brent, and good afternoon, everyone. We appreciate you joining us today and for your continued interest in MDU Resources Group, Inc. This morning, we reported first quarter 2026 earnings of $80.8 million, or $0.39 per share. Results reflected strong operational performance across our businesses, offset by mild winter weather impacts, which reduced earnings by approximately $0.03 per share. At the same time, rate relief and recent investments such as the Badger Wind ...