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01/11 04:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with increased earnings per share and capital investment, particularly in utility and midstream segments. Despite some concerns over weather-related margin impacts and vague management responses on future rate cases, the positive growth in earnings and investment plans outweigh these issues. With a market cap of approximately $3.47 billion, the stock is likely to react positively, albeit moderately, to these developments. The absence of share repurchase or dividend programs slightly tempers the sentiment, but overall, the outlook remains positive.
Adjusted Earnings per Share $3.6 per share, an increase from $3.45 per share year-over-year. The increase reflects strong growth in utility and midstream segments, partially offset by lower results in gas marketing.
Adjusted Earnings $214,000,000, an increase of almost $18,000,000 compared to last year. The increase is driven by higher contribution margin at Spire Missouri and strong earnings growth in the Midstream segment.
Gas Utilities Segment Earnings Approximately $195,000,000, over $7,000,000 higher than last year, driven by increased ISRS revenues and usage net of weather mitigation.
Capital Expenditures (CapEx) Year-to-Date $479,000,000, with a nearly 27% year-over-year increase in utility CapEx focused on upgrading distribution infrastructure.
Fiscal 2025 Capital Investment Target Increased by $50,000,000 to $840,000,000, including a $15,000,000 increase at Spire Missouri and a $35,000,000 increase at Midstream.
Proposed Revenue Increase in Missouri Rate Case $246,000,000, differing from the requested increase of $290,000,000 primarily due to staff’s proposed return on equity and equity layer.
Weather Mitigation Adjustment Not effective as revenues were not aligned with usage over the course of the quarter, impacting margins.
Utility Run Rate O&M Expense Lower by $800,000 compared to last year, with expectations to remain flat relative to fiscal 2024 levels.
Weighted Average Shares for FY 2025 Expected to be approximately 58,500,000, slightly lower than previously anticipated, benefiting adjusted earnings per share.
Midstream Earnings Outlook Increased by $8,000,000 due to higher rates and capacity, reflecting a realization of higher rates and asset optimization.
Corporate and Other Loss Increased by $4,000,000 primarily due to higher interest expense from higher short-term balances.
Missouri Rate Case Revenue Increase: The Missouri Public Service Commission staff recommended a $19,000,000 revenue increase in the infrastructure system replacement surcharge (ISRS) request, which if approved would bring annualized revenues to $72,600,000.
Senate Bill Four: Missouri Governor Kehoe signed Senate Bill Four into law, allowing utilities to set rates based on projected costs rather than historical expenses, effective July 2026.
St. Louis Economic Growth: Boeing was selected to build the next generation fighter aircraft, driving growth of high-quality jobs in the St. Louis area.
Capital Expenditures: Year-to-date capital expenditures totaled $479,000,000, with a 27% increase in utility CapEx focused on upgrading distribution infrastructure.
Increased Capital Investment Target: Fiscal 2025 capital investment target increased by $50,000,000 to $840,000,000, including $15,000,000 for Spire Missouri and $35,000,000 for Midstream.
Labor Agreement Renewal: Renewed a three-year labor agreement with local union 548 in Alabama, providing stability and focusing on operational excellence.
Leadership Transition: Scott Doyle appointed as President and CEO, ensuring a seamless transition while maintaining the company's strategic focus on organic growth and infrastructure investment.
Long-term EPS Growth Target: Reaffirmed long-term EPS growth target of 5% to 7%, supported by a ten-year $7.4 billion capital investment plan.
Regulatory Risks: The company is currently involved in a Missouri rate case, with a proposed revenue increase of $246 million, which is lower than the requested $290 million. The outcome of this case is uncertain and could impact future revenues.
Weather-Related Risks: The company experienced margin weakness due to weather-related factors, particularly in Missouri, which resulted in a $9 million reduction in customer margins. This weather mitigation adjustment was ineffective, leading to lower than expected revenues.
Supply Chain Challenges: The company has faced higher capital costs related to its midstream storage expansion project, which could impact return expectations.
Economic Factors: The company is navigating a changing economic landscape, including the impact of legislative changes such as Senate Bill 4, which allows utilities to set rates based on projected costs rather than historical expenses.
Interest Rate Risks: Higher borrowing balances have led to increased corporate costs, which may affect overall financial performance.
Competitive Pressures: The company is focused on maintaining its competitive edge through strategic infrastructure investments and operational excellence, but faces ongoing competitive pressures in the market.
Long-term EPS Growth Target: Reaffirming a long-term EPS growth target of 5% to 7%.
Capital Investment Plan: Ten-year capital investment plan of $7.4 billion, with an increase in fiscal 2025 capital investment target by $50 million to $840 million.
Infrastructure Investment: Focus on organic growth, infrastructure investment, and continuous improvement.
Regulatory Engagement: Ongoing collaboration with stakeholders in Missouri rate case and legislative advancements.
Labor Agreement: Renewed labor agreement with local union for stability and operational excellence.
Midstream Segment Growth: Investment in midstream segment totaling $84 million year to date, with expansion of Spire Storage West.
Fiscal 2025 EPS Guidance: Fiscal 2025 earnings guidance reaffirmed at $4.4 to $4.6 per share.
Capital Expenditure Update: Increasing fiscal 2025 capital investment target to $840 million.
Adjusted Earnings Outlook: Adjusted earnings per share growth target of 5% to 7% supported by rate base growth.
Midstream Earnings Outlook: Increasing midstream earnings outlook by $8 million due to higher rates and capacity.
Gas Utility Earnings Adjustment: Lowering gas utility earnings range by $11 million due to weather-related margin headwinds.
Adjusted Earnings Per Share Guidance: We are affirming our FY twenty twenty five adjusted earnings guidance range of $4.4 to $4.6 per share.
Weighted Average Shares: Weighted average shares for FY twenty twenty five are expected to be approximately 58,500,000.
Capital Investment Plan: We are increasing our fiscal twenty twenty five capital investment target by $50,000,000 to $840,000,000.
Shareholder Return Plan: Our long term adjusted earnings per share growth target is 5% to 7%.
Share Repurchase Program: None
Dividend Program: None
The earnings call summary indicates strong performance in Midstream and Gas Marketing, alongside a strategic acquisition and expansion plans. Despite some concerns over O&M expenses and financing strategies, the reaffirmed guidance and potential positive impacts from the acquisition and rate adjustments in Missouri suggest a positive outlook. The Q&A section shows analysts' confidence in the company's growth, even with some uncertainties, leading to an overall positive sentiment for the stock price over the next two weeks.
The earnings call presents a mixed outlook. The financial performance shows improvement with positive EPS and revenue growth, yet there are concerns about increased costs and integration risks. The reaffirmation of dividend growth and strategic focus on shareholder value are positives. The Q&A section reveals some uncertainties, particularly regarding future marketing results and operational efficiency. Overall, the sentiment is balanced, leading to a neutral prediction for stock price movement.
The earnings call presents a mixed picture: strong financial metrics (EPS growth, segment earnings) are offset by uncertainties (regulatory risks, supply chain issues). The Q&A reveals management's optimism but lacks clarity on critical issues. The absence of a shareholder return plan further tempers positive sentiment. Considering the market cap, the stock is likely to remain stable, reflecting a neutral sentiment.
The earnings call reveals strong financial performance with increased earnings per share and capital investment, particularly in utility and midstream segments. Despite some concerns over weather-related margin impacts and vague management responses on future rate cases, the positive growth in earnings and investment plans outweigh these issues. With a market cap of approximately $3.47 billion, the stock is likely to react positively, albeit moderately, to these developments. The absence of share repurchase or dividend programs slightly tempers the sentiment, but overall, the outlook remains positive.
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