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Why Is Spire (SR) Down 1.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Spire (SR - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Spire due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Spire Q3 Loss Narrower Than Expected Loss, Sales Lag
Spire Inc. 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.
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 previously 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -40.63% due to these changes.
VGM Scores
Currently, Spire has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Spire has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Spire (SR) Down 1.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Spire (SR - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Spire due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Spire Q3 Loss Narrower Than Expected Loss, Sales Lag
Spire Inc. 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.
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 previously 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -40.63% due to these changes.
VGM Scores
Currently, Spire has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Spire has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.