MDU Resources Reports Third Quarter 2026 Results; Reaffirms Guidance

MDU’s Q3 net income fell, but utility earnings rose and Bakken East Pipeline advanced.

What the company is saying

MDU Resources Group, Inc. reports Q3 2026 consolidated net income of $14.0 million, down from $18.4 million in Q3 2025, with earnings per share at $0.07 versus $0.09 last year. The company highlights a 23.6% year-over-year increase in electric utility segment earnings to $26.5 million, driven by new rates, the Badger Wind Farm, and higher retail sales, especially to data centers. Nicole A. Kivisto, president and CEO, frames the narrative around executing the CORE strategy, emphasizing growth investments and long-term value creation. The company reaffirms 2026 EPS guidance of $0.93 to $1.00 and its 6–8% long-term EPS growth objective. A positive final investment decision was made for the Bakken East Pipeline, narrowing the capital estimate to $2.8–$3.1 billion, with construction expected 2028–2030. The announcement acknowledges that natural gas and pipeline segments underperformed due to higher costs, discontinued projects, and advisory expenses.

What the data suggests

Headline Q3 net income declined to $14.0 million from $18.4 million, and EPS fell to $0.07 from $0.09, while adjusted EPS was $0.08. For the nine months, net income edged up to $116.1 million from $114.1 million, with adjusted net income at $119.4 million. The electric utility segment outperformed, earning $26.5 million (up from $21.5 million), supported by $7.1 million in new rate revenue and $3.2 million from Badger Wind Farm. Retail electric sales rose 9.3%, and sales to data centers jumped 18.4%. The natural gas distribution segment posted a larger net loss of $20.7 million, despite $6.5 million in new rates and 7.1% higher volumes, due to increased O&M expenses and a $2.1 million loss from the discontinued Knott Landfill project. The pipeline segment’s earnings dropped to $13.1 million from $16.8 million, impacted by higher costs and Bakken East advisory expenses. Multiple rate cases and regulatory filings are pending or subject to refund, so some revenue increases are not yet realized. The Bakken East Pipeline is at the final investment decision stage, with a capital range of $2.8–$3.1 billion, but construction and earnings impact are several years away. The reaffirmed 2026 EPS guidance is above the current run-rate, relying on future approvals and project execution.

Analysis

The announcement provides a thorough breakdown of realised financial results, including net income, EPS, and segment performance, which supports a baseline of factual disclosure. However, the tone is somewhat inflated by the emphasis on reaffirmed guidance and long-term growth objectives, despite flat or declining per-share results in the most recent quarter. The Bakken East Pipeline is highlighted as a major milestone, but its benefits are long-dated (construction 2028-2030) and subject to regulatory approval, with a large capital outlay ($2.8–$3.1 billion) and no immediate earnings impact. Many claims regarding rate cases, revenue increases, and project contributions are forward-looking or contingent on approvals. The narrative leans on future growth and project potential, while current results are mixed and do not yet reflect these benefits. The gap between narrative and evidence is most pronounced in the pipeline and long-term EPS growth claims.

Risk flags

• ●Execution risk for the Bakken East Pipeline is high, as construction is not scheduled to begin until 2028 and completion is phased through 2030. The project requires regulatory approval and finalization of financing, with the company still evaluating funding structures and potential investor participation.
• ●Financial risk is present due to flat or declining per-share earnings in the most recent quarter, while guidance and long-term growth targets depend on successful rate case outcomes, regulatory approvals, and project execution. Several rate increases are pending or subject to refund, and not all are secured.
• ●Operational risk is evident in the natural gas distribution and pipeline segments, which saw higher losses or lower earnings due to increased costs, discontinued projects, and expensed advisory fees. These issues could persist if cost pressures or project setbacks continue.
• ●Disclosure risk exists because some segment-level operational claims, such as the impact of new rates or specific project contributions, lack detailed supporting calculations, limiting transparency for investors seeking to reconcile headline and segment results.

Bottom line

MDU Resources’ Q3 results show mixed performance: electric utility earnings are up sharply, but overall net income and EPS declined year-over-year, and the natural gas and pipeline segments underperformed. The company is betting on long-term growth from the Bakken East Pipeline, but this project will not deliver financial returns for several years and faces regulatory and financing hurdles. Near-term upside depends on the outcome of multiple rate cases and the company’s ability to control costs in underperforming segments. The reaffirmed 2026 EPS guidance is ambitious relative to current run-rate earnings, making future results highly contingent on execution and approvals. Investors should focus on regulatory progress, cost discipline, and concrete milestones for Bakken East as the next major catalysts. The most important takeaway is that while utility operations are strengthening, the company’s largest growth project is still years from contributing to earnings.

Announcement summary

(NYSE:MDU) MDU Resources Group, Inc. reported consolidated net income of $14.0 million for the third quarter of 2026, compared with $18.4 million in the same quarter last year. Earnings per share for the quarter were $0.07, compared with $0.09 in the third quarter of 2025. Adjusted earnings per share were $0.08, compared with $0.09 in the third quarter of 2025. For the nine months ended September 30, 2026, net income was $116.1 million, compared with $114.1 million for the same period in 2025. Diluted earnings per share for the nine months were $0.55, compared with $0.56 in 2025. Adjusted net income for the nine months was $119.4 million, compared with $114.1 million in 2025, and adjusted earnings per share were $0.57, compared with $0.56. Adjusted results exclude costs associated with the discontinued Knott Landfill renewable natural gas project and advisory costs for Bakken East. The company reaffirmed its 2026 guidance, expecting earnings per share in the range of $0.93 to $1.00. On September 30, 2026, the board made a positive final investment decision to proceed with WBI Energy's Bakken East Pipeline. The estimated capital investment range for Bakken East Pipeline has been narrowed to $2.8 billion to $3.1 billion, from a previous estimate of $2.7 billion to $3.2 billion. The pipeline will be approximately 350 miles long, with an initial capacity of 1.4 billion cubic feet of natural gas per day, and is subject to regulatory approval. Construction is expected during the 2028-2030 seasons, with phase one targeted for completion in late 2029 and phase two in late 2030. The electric utility segment earned $26.5 million in the third quarter of 2026, up from $21.5 million in the third quarter of 2025, a 23.6% increase. New rates contributed $7.1 million in revenue, and Badger Wind Farm contributed $3.2 million in earnings for the quarter. Total retail electric sales increased 9.3%, and sales to data center customers increased 18.4% compared to the same quarter in 2025. In North Dakota, an electric general rate case filed June 30, 2026, requested an annual revenue increase of $34.5 million, with interim rates reflecting a $26.3 million annual increase effective September 1, 2026, subject to refund. In Montana, a settlement agreement for a $10.0 million annual revenue increase is pending approval, with interim rates of $10.4 million effective since April 1, 2026, subject to refund. In Wyoming, final electric rates reflecting a $5.8 million annual increase became effective April 1, 2026. The natural gas distribution segment recorded a net loss of $20.7 million in the third quarter of 2026, compared with a net loss of $18.2 million in the third quarter of 2025. New rates contributed $6.5 million in additional revenue, and retail sales volumes increased 7.1%. The segment incurred a $2.1 million net of tax loss related to the discontinued Knott Landfill renewable natural gas project. In Washington, a multiyear natural gas rate case filed May 29, 2026, requests annual revenue increases of $25.1 million in year one and $18.1 million in year two. In Idaho, final rates reflecting a $13.0 million annual revenue increase have been in effect since January 1, 2026. In Oregon, a $12.2 million annual revenue increase has been approved, with final rates effective October 31, 2026. In Minnesota, a natural gas rate case filed October 30, 2026, requests a $4.5 million annual revenue increase, with an interim increase of $3.9 million pending approval. The pipeline segment earned $13.1 million in the third quarter of 2026, compared with $16.8 million in the third quarter of 2025. The FERC Section 7(c) application for Bakken East Pipeline is anticipated to be filed in the fourth quarter of 2026. The Line Section 32 Expansion Project filed its FERC Section 7(c) application in March 2026 and targets a late-2028 in-service date. The Minot Industrial Project is in development, with an agreement for cost recovery protections extended through late 2026. WBI Energy filed a FERC rate case on May 29, 2026, seeking a $31 million annual revenue increase, with approximately 30% due to proposed new depreciation and amortization rates. The proposed rates were accepted and suspended by FERC on June 30, 2026, to become effective December 1, 2026, subject to refund and hearing procedures if a settlement is not reached. MDU Resources' long-term earnings-per-share growth objective remains 6% to 8%.

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