MDU Resources Group, Inc. Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Q2 Earnings: Reported earnings of $21.3 million, or $0.10 per share, compared to $13.7 million, or $0.07 per share, in Q2 2025.

Year-to-Date Earnings: Total earnings of $102.1 million, or $0.49 per share, versus $95.7 million, or $0.47 per share, for the same period last year.

Electric Utility Segment: Earnings increased to $14.7 million from $10.4 million, driven by higher retail sales and recovery mechanisms related to renewable investments.

Natural Gas Distribution Segment: Seasonal loss improved to $3.9 million from $7.4 million, aided by new rates and higher retail sales volumes.

Pipeline Segment: Earnings decreased to $14.4 million from $15.4 million due to lower other income and increased depreciation expenses.

2Strategic Updates and Business Highlights

Bakken East Pipeline Project: All precedent agreements have been signed, securing nearly 1.2 billion cubic feet per day of transportation capacity. The project is designed for 1.4 billion cubic feet per day, with a final investment decision expected before a FERC 7(c) filing in Q4 2026.

Data Center Agreements: Signed an electric service agreement with Applied Digital for a new AI factory requiring 430 megawatts. Over 1 gigawatt of data center load is under signed agreements.

Regulatory Filings: Filed a general rate case in North Dakota for a $34.5 million revenue increase and an interim rate request of $26.3 million effective September 1, 2026. Other states have pending rate cases and settlements.

3Forward Guidance and Outlook

Earnings Guidance: Reaffirmed 2026 earnings per share guidance of $0.93 to $1.00, based on normal weather and economic conditions, customer growth, and successful execution of capital programs.

Long-term Growth Objective: Targeting an earnings per share growth of 6% to 8% annually.

Capital Program: Planned investments of approximately $3.1 billion from 2026 to 2030, with specific allocations for electric, natural gas, and pipeline segments.

4Challenges and Points of Concern

Increased Interest Expense: Higher long-term debt balances have led to increased interest expenses, impacting profitability.

Regulatory Risks: Pending approvals for rate cases and electric service agreements could affect revenue growth.

Pipeline Project Uncertainties: The timeline for the Bakken East project has shifted, with the FID now expected in Q4 2026, which may delay capital planning and investment decisions.

5Notable Q&A Insights

Financing for Bakken East: Management is exploring various financing options and is confident in securing funding for the project, with an emphasis on executing precedent agreements.

Community Engagement: MDU is actively engaging with communities regarding data center projects to address concerns and highlight benefits to existing customers.

Future Capital Plans: Updates to the capital plan will be provided post-Board discussions in late November, contingent on the final investment decision for the Bakken East project. Overall, MDU Resources Group reported solid financial performance in Q2 2026, driven by growth in its utility and pipeline segments, while also navigating regulatory challenges and planning for significant infrastructure investments.