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Spire (SR) Q3 Loss Narrower Than Expected Loss, Sales Lag
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Spire Inc. (SR - Free Report) reported a third-quarter fiscal 2024 loss of 14 cents per share, narrower than the Zacks Consensus Estimate of a loss of 18 cents.
The company reported a loss of 42 cents per share in the year-ago quarter. The year-over-year decline in losses can be attributed to strong results across each of its segments. Gas Utility earnings benefited from new rates, Gas Marketing earnings increased due to improved transportation margins and Midstream earnings were favorable as a result of new storage capacity that came online in the third quarter. The inclusion of MoGas and Salt Plains was another tailwind.
Revenues
Total revenues for the reported quarter were $414.1 million, which lagged the Zacks Consensus Estimate of $415 million by 0.3%. The top line also decreased 1.2% from $419 million registered in the year-ago quarter.
Total operating expenses were $383.4 million, down 5.7% from $406.5 million recorded in the prior-year period.
Operating income totaled $30.7 million, up 155.8% from $12 million reported in the prior-year quarter.
Net interest expenses increased 4.5% year over year to $48.8 million.
Segmental Performance
Gas Utility: The segment reported a net economic loss of $11 million, indicating an improvement from a loss of $12.3 million in the prior-year quarter. This indicates an improvement in the performance at Southeast Utilities.
Gas Marketing: The segment reported net economic earnings (NEE) of $1 million, an improvement from a loss of $2.5 million in the prior-year period. The fiscal third-quarter earnings benefited from asset optimization resulting in improved transportation margins.
Midstream: The Midstream segment reported NEE of $13.9 million compared with $3.6 million in the year-ago period. The increase was driven by higher storage earnings, implying additional capacity and new contracts at higher rates effective this quarter for Spire Storage West and Spire Salt Plains.
Other: Spire’s other activities reported a loss of $8.2 million compared with a loss of $7.4 million in the prior-year quarter.
Financial Highlights
Cash and cash equivalents as of Jun 30, 2024, were $7.4 million compared with $5.3 million as of Sep 30, 2023.
Long-term debt (less current portion) as of Jun 30, 2024, totaled $3.4 billion compared with $3.6 billion as of Sep 30, 2023.
Net cash provided by operating activities in the first nine months of fiscal 2024 totaled $829.5 million compared with $404.1 million in the year-ago period.
Guidance
Spire lowered its fiscal 2024 net economic earnings guidance to $4.15-$4.25 per share from the previousy guided range of $4.25-$4.45. The lowering in earnings guidance was due to the adverse impact of the warm winter, higher interest expense and bad debt expense experienced in the year. The Zacks Consensus Estimate for the same is pegged at $4.32 per share, higher than the company’s revised guided range.
SR projects capital investments worth $7.3 billion through 2033. This planned investment is expected to drive an annual rate-based growth of 7-8%. The company raised its fiscal 2024 capital expenditure guidance from $800 million to $830 million, driven by increased deployment of advanced meters.
Atmos Energy Corporation (ATO - Free Report) is slated to report third-quarter fiscal 2024 results on Aug 8, after market close. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $1.05 per share.
ATO’s long-term (three to five years) earnings growth rate is 7%. It delivered an average earnings surprise of 3.3% in the last four quarters.
Southwest Gas (SWX - Free Report) is slated to report second-quarter 2024 results on Aug 8, before market open. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.70 per share.
SWX’s long-term earnings growth rate is 6%. It delivered an average earnings surprise of 104.4% in the last four quarters.
MDU Resources Group (MDU - Free Report) is slated to report second-quarter 2024 results on Aug 8, before market open. The Zacks Consensus Estimate for 2024 earnings is pegged at $1.55 per share.
MDU’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for 2025 earnings is pegged at $1.65 per share.
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Spire (SR) Q3 Loss Narrower Than Expected Loss, Sales Lag
Spire Inc. (SR - Free Report) reported a third-quarter fiscal 2024 loss of 14 cents per share, narrower than the Zacks Consensus Estimate of a loss of 18 cents.
The company reported a loss of 42 cents per share in the year-ago quarter. The year-over-year decline in losses can be attributed to strong results across each of its segments. Gas Utility earnings benefited from new rates, Gas Marketing earnings increased due to improved transportation margins and Midstream earnings were favorable as a result of new storage capacity that came online in the third quarter. The inclusion of MoGas and Salt Plains was another tailwind.
Revenues
Total revenues for the reported quarter were $414.1 million, which lagged the Zacks Consensus Estimate of $415 million by 0.3%. The top line also decreased 1.2% from $419 million registered in the year-ago quarter.
Spire Inc. Price, Consensus and EPS Surprise
Spire Inc. price-consensus-eps-surprise-chart | Spire Inc. Quote
Highlights of the Release
Total operating expenses were $383.4 million, down 5.7% from $406.5 million recorded in the prior-year period.
Operating income totaled $30.7 million, up 155.8% from $12 million reported in the prior-year quarter.
Net interest expenses increased 4.5% year over year to $48.8 million.
Segmental Performance
Gas Utility: The segment reported a net economic loss of $11 million, indicating an improvement from a loss of $12.3 million in the prior-year quarter. This indicates an improvement in the performance at Southeast Utilities.
Gas Marketing: The segment reported net economic earnings (NEE) of $1 million, an improvement from a loss of $2.5 million in the prior-year period. The fiscal third-quarter earnings benefited from asset optimization resulting in improved transportation margins.
Midstream: The Midstream segment reported NEE of $13.9 million compared with $3.6 million in the year-ago period. The increase was driven by higher storage earnings, implying additional capacity and new contracts at higher rates effective this quarter for Spire Storage West and Spire Salt Plains.
Other: Spire’s other activities reported a loss of $8.2 million compared with a loss of $7.4 million in the prior-year quarter.
Financial Highlights
Cash and cash equivalents as of Jun 30, 2024, were $7.4 million compared with $5.3 million as of Sep 30, 2023.
Long-term debt (less current portion) as of Jun 30, 2024, totaled $3.4 billion compared with $3.6 billion as of Sep 30, 2023.
Net cash provided by operating activities in the first nine months of fiscal 2024 totaled $829.5 million compared with $404.1 million in the year-ago period.
Guidance
Spire lowered its fiscal 2024 net economic earnings guidance to $4.15-$4.25 per share from the previousy guided range of $4.25-$4.45. The lowering in earnings guidance was due to the adverse impact of the warm winter, higher interest expense and bad debt expense experienced in the year. The Zacks Consensus Estimate for the same is pegged at $4.32 per share, higher than the company’s revised guided range.
SR projects capital investments worth $7.3 billion through 2033. This planned investment is expected to drive an annual rate-based growth of 7-8%. The company raised its fiscal 2024 capital expenditure guidance from $800 million to $830 million, driven by increased deployment of advanced meters.
Zacks Rank
Spire currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Atmos Energy Corporation (ATO - Free Report) is slated to report third-quarter fiscal 2024 results on Aug 8, after market close. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $1.05 per share.
ATO’s long-term (three to five years) earnings growth rate is 7%. It delivered an average earnings surprise of 3.3% in the last four quarters.
Southwest Gas (SWX - Free Report) is slated to report second-quarter 2024 results on Aug 8, before market open. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.70 per share.
SWX’s long-term earnings growth rate is 6%. It delivered an average earnings surprise of 104.4% in the last four quarters.
MDU Resources Group (MDU - Free Report) is slated to report second-quarter 2024 results on Aug 8, before market open. The Zacks Consensus Estimate for 2024 earnings is pegged at $1.55 per share.
MDU’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for 2025 earnings is pegged at $1.65 per share.