MDU · MDU Resources Group, Inc.

Revenue for the first quarter of 2026 totaled $606.0 million, down 10.2% from $674.8 million in the prior year quarter. This decline stemmed primarily from a 15.9 percent decrease in retail sales volumes to all customer classes due to warmer weather. These weather-related headwinds were offset in part by weather normalization and decoupling mechanisms in certain jurisdictions, which help stabilize earnings by adjusting for volume variations outside management's control. Additionally, the revenue decrease was partially mitigated by continued strong customer demand for short-term natural gas transportation contracts, along with contributions from a growth project placed in service in 2025 and a contracted volume increase from a previously constructed project.

Despite the revenue contraction, operating income improved 2.5% to $115.7 million from $112.9 million, driving operating margin expansion to 19.1%. This resilience highlights the benefits of operational leverage and cost discipline, where lower purchased gas costs and other efficiencies outpaced the revenue drop. The Company's strategy of pursuing rate adjustments supports recovery of operating costs and capital investments, as well as reasonable returns allowed by regulators, including for items not covered by tracking mechanisms.

Net income was $80.8 million, a 1.4% decline from $82.0 million, with diluted EPS at $0.39 versus $0.40. Pressures on bottom-line results included higher interest expense in the electric business, largely tied to debt issuances funding recent capital investments such as the Badger Wind Farm. These investments align with long-term growth but temporarily elevate financing costs. Positively, the Other segment saw an increase in net income, driven primarily by income tax adjustments related to the Company's annualized estimated tax rate.