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MDU Resources Group Reports Record Earnings

MDU Resources Group Inc. reported second quarter earnings of $99.7 million, or 50 cents per share, a 61% increase over second quarter 2019 earnings of $61.8 million, or 31 cents per share. For the six months ended June 30, MDU Resources earned $124.8 million, or 62 cents per share, compared to $102.7 million, or 52 cents per share, in 2019.

"Our employees have done an outstanding job of continuing to provide essential services to our customers while safely working under modified conditions as prescribed by local, state and federal guidelines relating to COVID-19," said David L. Goodin, president and CEO of MDU Resources. "Our operations performed extremely well in the quarter, with record revenues and earnings at both our construction businesses and very strong results from our regulated energy delivery businesses.

"Our geographic diversity and focus on midsize markets has served us well as businesses have generally remained open. Our utility and pipeline operations continue to provide needed energy to customers, and our total construction backlog remains at a near-record level of nearly $2.2 billion. Our team remains focused on safely providing the essential services that are critical to Building a Strong America."

Based on strong year-to-date performance and the company's outlook for the remainder of the year, MDU Resources is restoring its original 2020 earnings guidance to $1.65 to $1.85 per share. The company also is increasing revenue guidance for its construction materials and construction services businesses.

The construction materials business had record second quarter revenues and earnings. Revenues were $621.1 million, compared to $596.0 million for the same period last year, and earnings of $53.0 million were an 82% increase over second quarter 2019 earnings of $29.2 million.

Favorable weather across the majority of the company's market area allowed the company to complete more contracting work in the quarter compared to last year. Recent acquisitions also contributed to the increase. The construction materials backlog of work at June 30 was $875 million, the second-highest in the company's history behind last year's record $1.04 billion at June 30.

The construction services business also had record revenues and earnings for the second quarter. Revenue was $497.2 million this quarter, compared to $464.9 million in second quarter 2019. Earnings were up 22% at $27.9 million, compared to last year's record second quarter earnings of $22.8 million. Higher workloads and acquisitions contributed to the earnings increase. 

While some projects have experienced slowdowns as a result of the COVID-19 pandemic, overall the company continues to see strong demand for its services. The construction services backlog of work at June 30 was an all-time record $1.31 billion, compared to last year's record $1.15 billion at June 30.

The electric and natural gas utility earned $11.2 million in the second quarter, compared to $1.2 million in second quarter 2019. This business benefited in the quarter from lower operating costs, particularly for contract services, as well as higher investment returns and the absence of a write-down on a non-utility investment recorded in the second quarter of 2019. 

The pipeline business earned $9.0 million in the second quarter, compared to $7.1 million in the second quarter last year. The company benefited from higher revenue associated with its Demicks Lake, Demicks Lake Expansion and Line Section 22 growth projects, which were placed in service in late 2019 and early 2020.