MDU Resources Group Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 7 May 2026: press release. Guidance figures: 2 raised, 1 new, 5 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net income and EPS slightly lower: Net income was $80.8 million against $82.0 million a year earlier, and diluted EPS was $0.39 against $0.40. Management put the milder-weather impact at about $0.03 per share. Source
• Electric earnings edged lower: Electric net income was $14.5 million. Badger Wind Farm recovery and rate mechanisms helped, but milder weather cut retail sales by about $2 million. Source
• Gas distribution earnings near flat: Lower volumes from warmer weather, about $5 million, were largely offset by weather normalization and rate relief in Washington, Idaho, Montana and Wyoming. Source
• Interest expense rose on new debt: Interest expense rose to $32.7 million from $26.8 million, which management tied to debt issued for recent capital investments. Source
• Precedent agreements about 40% signed: About 40% of the submitted Bakken East interest is signed under precedent agreements, and more precedent agreements are in active negotiation. Source
• No final decision on Bakken East: The company has not reached a final investment decision and will finish precedent negotiations first; financing options are under review. Source

“We delivered a strong first quarter when accounting for the impact of warmer weather across our service territory,”

Nicole A. Kivisto, president and CEO of MDU Resources

Guidance

What changed from last quarter

• Ended: The binding open season for Bakken East closed with about 1.4 billion cubic feet per day of submitted interest. Source
• New: North Dakota committed firm capacity of $50 million a year for ten years to the Bakken East project. Source
• New: Montana interim electric rates were approved, subject to refund, after the commission denied interim relief in the prior release. Source
• New: In April 2026 a Washington rate revision was filed, reducing annual revenue for plant not yet in service at year-end 2025. Source
• New: Forward sale agreements from the December 2025 offering settled on March 13, 2026, issuing new common shares for proceeds. Source
• New: The cost recovery agreement for the proposed Minot Industrial Project was extended through late 2026. Source
• Guidance raised: The 2026 capital expenditure estimate rose from $560 million to $565 million in this release. Source

Results and growth drivers

• Net income and EPS slightly lower: Net income was $80.8 million against $82.0 million a year earlier, and diluted EPS was $0.39 against $0.40. Management put the milder-weather impact at about $0.03 per share. Source
• Rate relief and new assets offset: Management said rate relief and recent investments contributed positive results, and normalization mechanisms in several states helped offset lower volumes. Source
• Weather ran 10% to 30% milder: Temperatures were 10% to 30% milder than last year across the service territory, with temperatures 20% higher in Idaho and 30% higher in Montana. Source

Segments and regions

• Electric earnings edged lower: Electric net income was $14.5 million. Badger Wind Farm recovery and rate mechanisms helped, but milder weather cut retail sales by about $2 million. Source
• Gas distribution earnings near flat: Lower volumes from warmer weather, about $5 million, were largely offset by weather normalization and rate relief in Washington, Idaho, Montana and Wyoming. Source
• Pipeline earnings below prior record: Pipeline net income was $15.3 million against a record $17.2 million, with contributions from a growth project recently placed in service. Source
• Other net income rose on tax items: Other net income was $6.8 million against $5.1 million, reflecting tax adjustments tied to the annualized estimated tax rate, partly offset by higher operation and maintenance expense. Source

“Our ability to deliver consistent results in a dynamic energy environment speaks to the strength and operational discipline of our teams,”

Nicole A. Kivisto, president and CEO of MDU Resources

Costs, margins and pricing

• Purchased gas cost fell sharply: Purchased natural gas sold fell to $239.4 million from $317.2 million, and average natural gas cost per dekatherm was $5.87 against $6.33. Source
• Operation and maintenance rose: Operation and maintenance expense rose to $114.8 million from $111.1 million, with materials and payroll costs cited in the pipeline segment. Source
• Interest expense rose on new debt: Interest expense rose to $32.7 million from $26.8 million, which management tied to debt issued for recent capital investments. Source
• Pass-through costs have minimal effect: Items such as electric fuel, natural gas costs and conservation are passed through to customers, with minimal effect on earnings. Source

Demand and the order book

• Demand trends called encouraging: Management said it sees encouraging demand trends, including continued data center interest and interest in the proposed Bakken East project. Source
• Precedent agreements about 40% signed: About 40% of the submitted Bakken East interest is signed under precedent agreements, and more precedent agreements are in active negotiation. Source
• Short-term transport demand continued: Customer demand for short-term natural gas transportation contracts continued, supporting pipeline results. Source

“Our employees remain focused on safety, reliability and cost-effectiveness, enabling us to deliver long-term value to our customers and stockholders.”

Nicole A. Kivisto, president and CEO of MDU Resources

Capital, cash and returns to shareholders

• Operating cash flow fell: Net cash from operating activities was $149.2 million against $217.5 million; investing used $91.2 million and financing used $32.9 million. Source
• Debt share and market value: Total debt was $2,596 million against $2,194 million, and debt was 47.2% of capitalization. Market value was 149.2% of book value. Source
• Electric capital spending for 2026: Estimated 2026 capital spending is $144 million for electric, $361 million for natural gas distribution and $60 million for pipeline. Source

Strategy and investment

• No final decision on Bakken East: The company has not reached a final investment decision and will finish precedent negotiations first; financing options are under review. Source
• Financing options under review: Management will weigh balance sheet use, potential partnerships and other options to finance a project of this size. Source
• Line 32 serves new power plant: The Line Section 32 expansion will provide gas transportation to a new electric generation facility in northwest North Dakota. Source
• Minot Industrial project scope: The proposed Minot Industrial Project could be a pipeline of about 90 miles plus ancillary facilities to serve anticipated industrial demand. Source

Regulatory and rate cases

• Oregon gas case still pending: The Oregon gas rate case filed in November 2025 is pending and requests a $16.4 million annual increase. Source
• North Dakota filing expected later: Management anticipates a North Dakota general rate case filing later this year, and a Minnesota filing is also anticipated later this year. Source
• Wyoming safety rider awaits ruling: The Wyoming System Safety and Integrity Rider had a hearing on April 9, 2026 and remains before the Wyoming Public Service Commission. Source

Coming up, as management said on 7 May 2026

• Bakken East phase dates: Phase One is targeted for completion in November 2029, and Phase Two in November 2030. Source
• Line 32 construction target: Construction of Line Section 32 is targeted for completion in late 2028 and depends on regulatory approvals. Source
• Washington rate case this year: Management expects to file a multi-year Washington general rate case during 2026. Source

Figures management reported

Risks management discussed

• External: Guidance assumes normal weather for the rest of the year, after milder temperatures reduced volumes in the quarter. Source
• Demand: Lower interruptible storage withdrawals reduced storage-related revenue in the pipeline segment. Source
• Financial: Higher interest and depreciation tied to Badger Wind Farm reduced electric earnings in the period. Source
• Regulatory: Higher Montana property tax accruals reduced pipeline results. Source
• External: Management noted evolving market dynamics, including data center development considerations, as the Bakken East project advances. Source

Earlier plans management reported on

• Met: The prior release anticipated a FERC filing in March 2026; this release reports the application was filed in March 2026. Source
• Met: The prior release anticipated Wyoming electric rates effective April 1, 2026; this release reports them effective that date. Source
• Met: The prior release said year two rates would take effect March 1, 2026; this release reports them effective that date. Source

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.