Energy and construction materials company MDU Resources (NYSE:MDU) fell short of the market’s revenue expectations in Q2 CY2026, but sales rose 6.8% year on year to $375.2 million. Its GAAP profit of $0.10 per share was 29.3% above analysts’ consensus estimates.
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MDU Resources (MDU) Q2 CY2026 Highlights:
- Revenue: $375.2 million vs analyst estimates of $396.6 million (6.8% year-on-year growth, 5.4% miss)
- EPS (GAAP): $0.10 vs analyst estimates of $0.08 (29.3% beat)
- EPS (GAAP) guidance for the full year is $0.97 at the midpoint, missing analyst estimates by 1.2%
- Operating Margin: 12.8%, up from 8.5% in the same quarter last year
- Market Capitalization: $4.18 billion
"We delivered solid second quarter results while continuing to position the company for long-term growth," said Nicole A. Kivisto, president and CEO of MDU Resources.
Company Overview
Founded to provide electricity to towns in Minnesota, MDU Resources (NYSE:MDU) provides products and services in the utilities and construction materials industries.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. MDU Resources struggled to consistently generate demand over the last five years as its sales dropped at a 20.1% annual rate. This was below our standards and is a sign of poor business quality.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. MDU Resources’s annualized revenue growth of 192% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, MDU Resources’s revenue grew by 6.8% year on year to $375.2 million, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 13.7% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is commendable and indicates the market sees success for its products and services.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
MDU Resources has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 11.8%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.
Looking at the trend in its profitability, MDU Resources’s operating margin rose by 7.5 percentage points over the last five years, showing its efficiency has meaningfully improved.
In Q2, MDU Resources generated an operating margin profit margin of 12.8%, up 4.2 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for MDU Resources, its EPS and revenue declined by 8.4% and 20.1% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, MDU Resources’s low margin of safety could leave its stock price susceptible to large downswings.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For MDU Resources, its two-year annual EPS declines of 31.1% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q2, MDU Resources reported EPS of $0.10, up from $0.07 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects MDU Resources’s full-year EPS to grow 11.6% from $0.95 to $1.06.
Key Takeaways from MDU Resources’s Q2 Results
It was good to see MDU Resources beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $19.86 immediately following the results.
MDU Resources may have had a tough quarter, but does that actually create an opportunity to invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).