MDU Resources Group Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 5 November 2026: press release. Guidance figures: 2 raised, 1 lowered, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net income and EPS declined: Net income was $14.0 million against $18.4 million a year earlier. Diluted EPS was $0.07 against $0.09. Source
• Electric earnings rose 23.6%: Electric segment net income was $26.5 million, up from $21.5 million in the third quarter of 2025. Source
• Seasonal loss widened to $20.7M: The natural gas distribution segment recorded a seasonal net loss of $20.7 million, compared with a net loss of $18.2 million a year earlier. Source
• North Dakota electric case pending: Interim electric rates of $26.3 million a year took effect Sept. 1, subject to refund, while the $34.5 million request is pending. Source
• Data center sales up 18.4%: Sales to data center customers rose 18.4% compared with the same quarter of 2025, within the commercial class. Source
• Bakken East 350-mile pipeline design: The pipeline runs from the Bakken in western North Dakota to near Fargo, with an initial capacity of 1.4 Bcf per day and subject to regulatory approval. Source

“At the same time, we reached a significant milestone with our positive final investment decision on Bakken East, moving forward a project that we believe positions us well for long-term growth.”

Nicole A. Kivisto, president and CEO of MDU Resources

Guidance

What changed from last quarter

• Guidance kept: The 2026 diluted EPS guidance range of $0.93 to $1.00 was reaffirmed and not changed from the second quarter. Source
• New: The board made a positive final investment decision on the Bakken East Pipeline on Sept. 30, 2026, after the second quarter, when the project was still under development. Source
• New: Cascade Natural Gas filed a Minnesota natural gas rate case on Oct. 30, 2026, which was not in the prior quarter's filings. Source
• Ended: Cascade Natural Gas discontinued development of the Knott Landfill renewable natural gas project in Bend, Oregon. Source

Results and growth drivers

• Net income and EPS declined: Net income was $14.0 million against $18.4 million a year earlier. Diluted EPS was $0.07 against $0.09. Source
• Adjusted earnings per share $0.08: Adjusted EPS, which excludes the Knott Landfill loss and Bakken East advisory costs, was $0.08 against $0.09 in the prior-year quarter. Source
• Nine-month net income $116.1 million: Nine-month net income was $116.1 million against $114.1 million, and nine-month diluted EPS was $0.55 against $0.56. Source
• Gas and pipeline hit by items: Management said the natural gas distribution and pipeline results were affected by the Knott Landfill decision and Bakken East advisory costs. Source

Electric segment earnings

• Electric earnings rose 23.6%: Electric segment net income was $26.5 million, up from $21.5 million in the third quarter of 2025. Source
• New rates and Badger Wind added: New rates in North Dakota, Montana and Wyoming added $7.1 million of revenue. Badger Wind Farm contributed $3.2 million in earnings. Source
• Retail electric sales rose 9.3%: Total retail electric sales were up 9.3%, with growth in every customer class. Source
• Warmer weather lifted electric volumes: Management attributed higher volumes across all customer classes largely to warmer weather. Source
• Badger Wind costs offset part: Higher operation and maintenance, interest and depreciation costs at Badger Wind Farm partly offset the earnings increase. Source

“Our employees are the foundation of our ability to safely and reliably serve customers while advancing these growth opportunities,”

Nicole A. Kivisto, president and CEO of MDU Resources

Natural gas distribution loss

• Seasonal loss widened to $20.7M: The natural gas distribution segment recorded a seasonal net loss of $20.7 million, compared with a net loss of $18.2 million a year earlier. Source
• Volumes up 7.1%, customers up 1.5%: New rates in Idaho and Washington added $6.5 million of revenue, alongside higher retail volumes and customer growth. Source
• Higher costs more than offset gains: Higher operation and maintenance expense, higher interest expense and lower returns on nonqualified benefit plan investments outweighed the benefits. Source
• Knott Landfill loss in costs: Operation and maintenance expense included a $2.1 million net of tax loss tied to the discontinued Knott Landfill project, along with higher payroll-related costs. Source

Pipeline and Other results

• Pipeline net income fell: Pipeline net income was $13.1 million, compared with $16.8 million in the third quarter of 2025. Source
• Bakken East advisory costs expensed: Bakken East advisory costs that did not qualify for capitalization were expensed in the quarter, totaling $0.7 million net of tax. Source
• Storage and interruptible volumes lower: Lower storage activity and interruptible volumes reduced results, partly offset by short-term transportation contracts. Source
• Other net loss rose on insurer claims: The Other category net loss was $4.9 million, against $1.7 million, mainly from higher captive insurer claims and income tax adjustments. Source

“That focus on providing safe, reliable, energy while responsibly managing costs remains central to how we continue to grow.”

Nicole A. Kivisto, president and CEO of MDU Resources

Rate cases and regulatory filings

• North Dakota electric case pending: Interim electric rates of $26.3 million a year took effect Sept. 1, subject to refund, while the $34.5 million request is pending. Source
• Montana settlement awaiting approval: A $10.0 million annual settlement is pending before the Montana Public Service Commission, with interim rates of $10.4 million in effect. Source
• Washington gas case pending: The Washington multiyear gas case seeks $25.1 million in year one and $18.1 million in year two, and remains pending. Source
• Oregon gas increase approved: Oregon's $12.2 million increase is approved with final rates effective Oct. 31, 2026. Idaho and Wyoming increases are also in effect. Source
• WBI Energy FERC rate case: WBI Energy's FERC filing seeks $31 million a year, with about 30% from proposed new depreciation and amortization rates. Source

Demand, customers and data centers

• Data center sales up 18.4%: Sales to data center customers rose 18.4% compared with the same quarter of 2025, within the commercial class. Source
• Large-load costs assigned through contracts: Costs needed to serve large-load customers are assigned through contracts, tariffs and regulatory approvals, per management. Source
• Storage balance below prior year: Quarter-end customer storage was 46.2 MMdk against 48.2 MMdk a year earlier, after net injections of 4.7 MMdk against 13.6 MMdk. Source
• Electric volumes rose across classes: Retail electric volumes rose in residential, commercial and industrial classes, with commercial sales at 787.4 million kWh. Source

Costs and expenses

• Pipeline payroll, materials, consulting up: Pipeline operation and maintenance expense rose on payroll and material costs, plus consulting tied to the recently filed rate case. Source
• Interest expense rose to $32.6M: Consolidated interest expense was $32.6 million against $26.4 million. Electric interest rose to $11.3 million from $7.6 million. Source
• Income tax expense unchanged at $2.3M: Consolidated income tax expense was $2.3 million in both periods, while nine-month expense was $10.3 million against $11.6 million. Source
• Lower benefit plan investment returns: Lower returns on nonqualified benefit plan investments reduced results across the segments in the quarter. Source

Cash flow, debt and capital

• Operating cash flow lower year to date: Nine-month net cash from operating activities was $347.6 million, against $392.8 million a year earlier. Source
• Total debt rose to $2,595M: Total debt was $2,595 million, up from $2,353 million, and was 46.6% of capitalization. Source
• Book value per share $13.92: Book value per common share was $13.92, against $13.33. Market price was $18.54, or 133.2% of book value. Source
• Cash balance down to $27.6M: Cash, cash equivalents and restricted cash ended the period at $27.6 million, against $75.9 million a year earlier. Source
• Diluted share count higher: Third-quarter weighted average diluted shares were 212.7 million, against 205.3 million a year earlier. Source

Strategy and growth projects

• Bakken East 350-mile pipeline design: The pipeline runs from the Bakken in western North Dakota to near Fargo, with an initial capacity of 1.4 Bcf per day and subject to regulatory approval. Source
• Bakken East construction seasons 2028-2030: Construction is planned for the 2028 to 2030 seasons, with facilities placed in service in two phases. Source
• Minot project development continues: A potential Minot project could include about 90 miles of 20-inch pipeline, with development continuing under a cost recovery agreement. Source

Coming up, as management said on 5 November 2026

• Bakken East FERC application due Q4: The FERC Section 7(c) application for Bakken East is anticipated to be filed in the fourth quarter of 2026. Source
• Bakken East first phase late 2029: The first phase, from the Bakken to central North Dakota, is expected to be completed in late 2029. Source
• Minnesota interim increase from Jan. 1, 2027: A $3.9 million interim gas rate increase was filed and, if approved, will be implemented on Jan. 1, 2027. Source

Figures management reported

Risks management discussed

• Regulatory: Interim rates and the FERC rate case are subject to refund, and hearing procedures may follow if no settlement is reached. Source
• Regulatory: Bakken East is subject to regulatory approval, which the company noted in describing the project's design. Source
• External: The 2026 guidance depends on assumptions including normal weather and economic and operating conditions for the rest of the year. Source
• Financial: Financing for Bakken East is not yet set, and the company is evaluating structures that may include outside investors. Source
• Demand: Lower interruptible transportation volumes and storage injections reduced pipeline results in the quarter. Source

Earlier plans management reported on

• Not stated: The Line Section 32 Expansion continues to target a late-2028 in-service date, subject to regulatory approvals. Source
• Not stated: The second phase of Bakken East has a target completion date of late 2030 at the Mapleton compressor station. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 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.