MDU Resources Q2 2025: Key Contradictions in EPS Outlook, Data Center Strategy, and Capital Plans

EPS growth outlook, data center strategy, equity issuance guidance, relationship between Bakken East pipeline and storage expansion, and EPS guidance and operating expenses are the key contradictions discussed in MDU Resources Group's latest 2025Q2 earnings call.



Earnings and Operating Expense Challenges:
- MDU Resources Group reported income from continuing operations of $14.1 million or $0.07 per diluted share for Q2 2025, down from $20.2 million or $0.10 per share in 2024.
- The decrease was attributed to unfavorable weather impacts at the Natural Gas Distribution segment and increased operating costs across the business, including higher payroll and insurance costs.

Regulatory and Infrastructure Investments:
- MDU Resources filed general rate cases in Wyoming and Idaho during Q2, aiming for increased investments in utility infrastructure and regulatory compliance.
- These investments are driven by the need to maintain and enhance utility services and meet customer demand, particularly in data center load and natural gas transportation services.

Data Center Expansion and Load Management:
- MDU Resources has 580 megawatts of data center load under signed electric service agreements, with 350 megawatts expected to come online by the end of 2026.
- The company is pursuing a capital-light business model for data center load to benefit earnings and returns, while also providing cost savings to other retail customers.

Pipeline Segment Performance:
- The pipeline segment posted Q2 earnings of $15.4 million, down from $17.3 million in the prior year, excluding a customer settlement in 2024.
- The decrease was primarily due to higher operation and maintenance expenses, though offset by increased transportation revenue from the Walton expansion project and short-term natural gas transportation contracts.

Bakken East Pipeline Project Status:
- MDU Resources is considering the Bakken East pipeline project, which could run approximately 350 miles to meet forecasted natural gas production growth and provide transportation services.
- The project is not currently in the 5-year capital forecast and would be incremental if MDU determines to proceed, based on customer commitments and commercial terms.