Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Spire Inc (SR, Financial) reported adjusted earnings of $1.34 per share, reflecting growth in gas utility and midstream segments.
- The company is reaffirming its long-term EPS growth target of 5% to 7% and fiscal 2025 earnings guidance of $4.40 to $4.60 per share.
- Spire Inc (SR) plans to invest $790 million in fiscal 2025, focusing on reliability system modernization and new service connections.
- The company's 10-year CapEx plan remains at $7.4 billion, with 98% targeted at utility growth.
- Spire Inc (SR) is committed to maintaining flat O&M expenses relative to fiscal 2024 levels, demonstrating effective cost management.
Negative Points
- Adjusted earnings per share decreased from $1.47 a year ago to $1.34, indicating a decline in profitability.
- Lower earnings were reported in the gas marketing segment due to reduced market volatility and higher transportation and storage fees.
- Spire Missouri experienced lower usage, resulting in a $3.4 million decrease in volumetric margins.
- The company faced warmer-than-normal weather in Missouri and Alabama, impacting residential customer usage and margins.
- Higher corporate costs were noted due to the absence of a $6.3 million after-tax benefit from an interest rate hedge settlement in the prior year.
Q & A Highlights
Q: Can the warmer-than-normal weather impact in the first quarter be offset by colder weather in the second quarter?
A: Adam Woodard, CFO, noted that while the first quarter was warmer, the winter season is still ongoing, and there is potential for colder weather to offset the earlier impact. He emphasized that it's early in the winter season, and there's still time for weather patterns to balance out.
Q: How is the marketing segment performing given recent market volatility, and can it still meet its guidance?
A: Adam Woodard expressed confidence that the marketing segment will meet its guidance despite first-quarter results. He mentioned that the second quarter started with a constructive backdrop and that they are comfortable with the segment's trajectory.
Q: Regarding the rate case, how does the strategy change with the inclusion of discrete adjustments beyond the true-up period?
A: Scott Doyle, Acting CEO, stated that they are pleased with the progress of the rate case and the procedural schedule. The inclusion of discrete adjustments is seen as a positive development, allowing for balanced updates to capital and associated costs. The strategy remains focused on achieving constructive outcomes.
Q: What is the expected customer bill increase from the rate case, and how might this trend over time?
A: Scott Doyle explained that the proposed increase is about $14 to $15 per month on average. However, due to lower gas costs, the net effect on customer bills should return them to previous levels. Future trends will depend on ongoing investments in system modernization.
Q: How is Spire managing inflationary pressures on O&M expenses, and can they maintain flat O&M for the year?
A: Adam Woodard acknowledged ongoing cost pressures but expressed confidence in maintaining flat O&M expenses for the year. He highlighted their focus on cost management and their ability to control expenses effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
