MDU Resources Group Inc. reported third-quarter consolidated adjusted earnings of $74.9 million, or 38 cents per share, compared to $68.2 million, or 35 cents per share for the third quarter of 2014. On a Generally Accepted Accounting Principles basis the company reported a loss of $139.6 million, or 72 cents per share, compared to third-quarter 2014 earnings of $103.0 million, or 53 cents per share.
The construction materials division finished the quarter strong.
The company announced that it recently entered into five purchase and sale agreements and closed on one of the agreements in October, for the sale of the oil and natural gas assets held by its indirect subsidiary, Fidelity Exploration & Production Co. The other four sale agreements are expected to close before year-end. The combined sale proceeds from the five agreements and estimated tax benefits are expected to be approximately $450 million. Debt repayment is planned as the primary use of funds. The company has one remaining property that it continues to market, which represents less than 10 percent of total year-to-date production.
“We are pleased to be nearly complete with the sale process for our oil and natural gas assets,” said David L. Goodin, president and CEO of MDU Resources. “The sale prices are in line with current and prospective market conditions, and exiting the exploration and production business will allow us to focus more fully on our remaining businesses.
“Our consolidated adjusted earnings per share for the quarter were 9 percent higher than last year,” Goodin said. “Our electric utility had a good quarter with 7 percent sales growth, partially offset by a normal seasonal loss for our natural gas business, and at our pipeline and energy services group we continued to see commodity price challenges. Our construction materials business had record earnings that were 25 percent higher on 4 percent revenue growth with operating income improving across all regions. While our construction services business had lower workloads in the quarter, backlog additions were strong.”
The construction materials business had record earnings for the quarter of $68.8 million. Margins increased across all product lines. Backlog at Sept. 30 was $533 million compared to $476 million a year ago. The construction services group experienced decreased workloads compared to 2014 due to completing several higher-margin large projects a year ago. The business continues to rebuild backlog, which at the end of the quarter totaled $458 million compared to $348 million in 2014.