Spire Inc. (SR) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary presents a mixed picture. While there are positive aspects such as increased gas marketing earnings and strong interest in asset sales, uncertainties remain. Management's lack of quantitative details on marketing performance and the delay in the storage asset sale process raise concerns. Additionally, potential equity issuance could impact stock price. The overall sentiment is neutral, considering the market cap and absence of strong positive catalysts or negative surprises.
Key Financial Performance
Adjusted Earnings Per Share (EPS) $1.77 per share, up from $1.34 per share a year ago, reflecting a strong year-over-year improvement due to solid execution in the Gas Utility business and contributions from Marketing and Midstream segments.
Gas Utilities Earnings $104 million, up over 33% or $26 million from last year, driven by new rates in Missouri and higher margin under the RSE in Alabama, partially offset by lower volumetric margin in both Missouri and Alabama, along with higher O&M, depreciation, and interest expense.
Gas Marketing Earnings $4.5 million, an increase of $2.3 million due to increased portfolio optimization opportunities.
Midstream Earnings $12.7 million, up almost $1 million from last year, driven by additional capacity at Spire Storage, partially offset by higher depreciation and interest expense.
Capital Expenditures (CapEx) $230 million in the quarter, lower year-over-year due to near completion of advanced meter upgrades in the St. Louis region and the wrap-up of the storage expansion project.
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Operating Highlights
Adjusted Earnings: Reported adjusted earnings of $1.77 per share, up from $1.34 per share a year ago, reflecting strong execution in the Gas Utility business and contributions from Marketing and Midstream segments.
Tennessee Acquisition: On track to close the acquisition of the Piedmont Tennessee business in Q1 2026, strengthening regulated growth profile. Financing plan includes $900 million Junior Subordinated Notes and $825 million Senior Notes.
Capital Expenditures: Invested $230 million in Q1, primarily in Gas Utility operations for system upgrades, infrastructure modernization, and new business connections. 2026 CapEx expected to be $809 million.
Cost Management: Focused on cost management and customer affordability while investing in system improvements and safety.
Portfolio Simplification: Ongoing evaluation of potential sale of natural gas storage assets to simplify portfolio. Update expected later this quarter.
Long-term Growth Targets: Reaffirmed 5%-7% adjusted EPS growth target supported by a 10-year $11.2 billion capital plan and disciplined investment strategy.
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Risk or Challenges
Regulatory Approvals: The acquisition of the Piedmont Tennessee business is pending approval from the Tennessee Public Utility Commission, which could delay the transaction and impact the company's regulated growth profile.
Debt and Financing Risks: The company plans to use a mix of debt, equity, and hybrid securities to finance the Tennessee acquisition. This includes $900 million in Junior Subordinated Notes and $825 million in Senior Notes, which could increase financial leverage and interest expenses.
Natural Gas Storage Asset Sale: The timeline for the sale of natural gas storage assets has extended beyond initial expectations, creating uncertainty in portfolio simplification and potential delays in achieving financial targets.
Operational Costs: Higher O&M (Operating and Maintenance), depreciation, and interest expenses partially offset earnings growth in the Gas Utilities segment, which could pressure margins.
Weather-Related Risks: Extreme weather events like Winter Storm Fern increase operational demands and costs, posing challenges to maintaining reliability and affordability.
Customer Affordability: Efforts to manage costs and maintain customer affordability are central to the strategy, but rising operational and financing costs could strain these efforts.
Regulatory and Rate Case Risks: The company is preparing for a future test year Missouri rate case, and achieving constructive regulatory outcomes remains critical to financial performance.
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Guidance & Outlook
Adjusted EPS Guidance: Reaffirmed 2026 adjusted EPS guidance of $5.25 to $5.45 per share and 2027 adjusted EPS guidance of $5.65 to $5.85 per share. Long-term adjusted EPS growth target remains at 5% to 7%.
Capital Plan: 10-year capital plan of $11.2 billion, with the majority targeted toward utility investments. 2026 CapEx expected to be $809 million.
Rate Base Growth: Rate base growth of roughly 7% in Missouri, 7.5% in Tennessee, and 6% regulated equity growth in Alabama and Gulf.
Tennessee Acquisition: On track to close the acquisition of the Piedmont Tennessee business in Q1 2026. Financing plan includes a balanced mix of debt, equity, and hybrid securities. Integration planning is underway with an 18-month Transition Services Agreement.
Natural Gas Storage Assets: Evaluation of the potential sale of natural gas storage assets is ongoing, with an update expected later this quarter.
Base Business Financing Plan: Equity needs of $0 million to $50 million per year. Long-term debt issuances for 2026 increased by $250 million due to the decision to redeem preferred shares. Targeting FFO to debt of 15% to 16%.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you talk about how marketing was positioned during the volatility in gas markets in January and whether it captured some of that volatility?
A:Scott Doyle stated that the systems performed well across the enterprise during January, meeting all customer obligations. However, he mentioned it was too early to describe the performance quantitatively and deferred further discussion to the second quarter call.
Q:How did the utilities' hedging strategy perform in protecting customers from volatility?
A:Scott Doyle confirmed satisfaction with the utilities' hedging strategy, particularly in Missouri and Alabama, which operated effectively and protected customers during the volatility.
Q:Can you provide more color on the storage asset sales process, including market feedback, timing, and backup plans?
A:Scott Doyle mentioned that the evaluation process has taken longer than anticipated but emphasized the focus on obtaining the right value for the assets. Adam Woodard added that an announcement on the storage evaluation is expected later this quarter, and they are prepared to use a bridge loan if necessary.
Q:Was it harder to find interest or sell the storage assets together, or were valuations different from expectations?
A:Scott Doyle stated that there was strong interest in the assets, which can be sold either in combination or separately. The process is being allowed to play out fully to ensure the best outcome.
Q:Are there opportunities for large loads or generation facilities in your service territories that could boost growth?
A:Scott Doyle mentioned opportunities to serve generation needs, such as coal-to-gas conversions or new gas plants, but stated there was nothing to announce at this time.
Q:What is the timing for equity issuance related to the Tennessee acquisition?
A:Adam Woodard explained that $750 million remains to be raised or recycled through potential business sales. If equity issuance is needed, it would occur after the next call in May or June.
Q:How do you view the scale of the company post-Tennessee acquisition and storage asset sale, and what are your strategic thoughts on adding or removing utilities from the portfolio?
A:Scott Doyle emphasized the focus on closing the Tennessee transaction and integrating it seamlessly. He noted that the scale benefits would spread shared service costs over a larger base, benefiting customers and the company.
Q:What is the timeline for integrating Tennessee post-close, and what challenges are anticipated?
A:Scott Doyle acknowledged the significant effort required for integration, with transition services planned for 18 months. He expressed confidence in Spire's ability to manage the process effectively.
Q:Do you remain optimistic about completing the storage asset sale by the end of the quarter?
A:Scott Doyle expressed optimism, citing strong interest in the assets and a focus on obtaining good value, which has extended the process.
Q:How do the financing rates achieved compare to the assumptions in the fourth-quarter guidance?
A:Adam Woodard stated that the financing rates are relatively close to expectations and that the redemption of preferred shares was already contemplated in the guidance.
Q:Can you clarify the preferred impact on the corporate and other line items and its effect on EPS?
A:Adam Woodard confirmed that while the corporate and other line items are impacted, there is a direct offset from the preferred dividend impact, leaving EPS unchanged.
Q:What is the regulatory strategy and timeline for Missouri, particularly regarding the next rate case?
A:Scott Doyle indicated that the next rate case is anticipated to be filed in October or November, following the fiscal year-end. It will be the first future test year case, and they are preparing to work closely with the commission.
Q:Review of Unclear Management Responses
A:Management avoided providing quantitative details about the marketing performance during January's gas market volatility, deferring the discussion to the second quarter call. Additionally, no specific updates or announcements were made regarding opportunities for large loads or generation facilities in their service territories.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Agreement Spire
Agreement continuity
Alabama Gulf
Alabama Spire
Alabama benefit
American Gas
Association Winter
Bonds
Gas Utility
Inc stock
Junior Subordinated
Missouri Tennessee
Piedmont Tennessee
Spire Inc
Storm Fern
Subordinated Notes
Tennessee equity
Utilities
Winter Storm
acquisition Piedmont
base Missouri
base financing
call
confidence
depreciation interest
equity Alabama
financing plan
gas storage
margin
portfolio
term debt
upgrade
SR Transcript
Spire Inc. (SR) Q1 2026 Earnings Call Transcript
Unknown2-3
The earnings call summary presents a mixed picture. While there are positive aspects such as increased gas marketing earnings and strong interest in asset sales, uncertainties remain. Management's lack of quantitative details on marketing performance and the delay in the storage asset sale process raise concerns. Additionally, potential equity issuance could impact stock price. The overall sentiment is neutral, considering the market cap and absence of strong positive catalysts or negative surprises.
Spire Inc. (SR) Q4 2025 Earnings Call Transcript
Positive11-14
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.
Spire Inc. (SR) Q3 2025 Earnings Call Transcript
Unknown8-5
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.
Spire Inc. (SR) Q2 2025 Earnings Call Transcript
Unknown4-30
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.
SR Slides
SR Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
