SR-PA — Spire Inc.

Summary of Spire Inc. Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Earnings Per Share (EPS): $3.76, up from $3.17 in Q2 2025.
• Total Adjusted Earnings: $224 million, compared to $189 million year-over-year.
• Gas Utility Earnings: $235 million, a 20% increase driven by new rates in Missouri and Alabama, and recovery from a $1 billion rate base increase.
• Capital Expenditures: $386 million in the first half of 2026, with a projected full-year total of $797 million.
• Adjusted EPS Guidance for Fiscal 2026: Revised to $3.90 - $4.10 per share, reflecting lower customer usage and weather-related impacts.

2. Strategic Updates and Business Highlights

• Acquisition of Piedmont Tennessee: Successfully closed on March 31, 2026, enhancing Spire's regulated gas utility portfolio.
• Divestitures: Completed the sale of Spire Marketing and announced sales of Spire Storage and Spire Mississippi to focus on core regulated businesses. These moves are expected to improve earnings visibility and reduce market-based earnings exposure.
• Regulatory Approvals: Received a $16.5 million increase in the Infrastructure System Replacement Surcharge (ISRS) from the Missouri Public Service Commission.

3. Forward Guidance and Outlook

• Long-Term Growth Target: Reaffirmed adjusted EPS growth target of 5% to 7%.
• Fiscal 2027 Adjusted EPS Guidance: Maintained at $5.40 - $5.60, including full-year contributions from Spire Tennessee.
• Capital Investment Plan: A $11.2 billion 10-year capital plan is in place, supporting infrastructure investments and rate base growth.

4. Bad News, Challenges, or Points of Concern

• Weather-Driven Usage Decline: Customer usage in Missouri was significantly below expectations due to an unusually mild winter, impacting earnings and leading to a reduction in full-year Gas Utility guidance.
• Regulatory Challenges: Filed an accounting authority order (AAO) with the Missouri PSC to recover margin shortfalls caused by weather conditions, with a hearing scheduled for September 9. The outcome may not have a significant impact on earnings for the current fiscal year.
• Increased Costs: Higher depreciation expenses and taxes, along with elevated interest expenses due to increased long-term debt, are affecting overall financial performance.

5. Notable Q&A Insights

• Weather Normalization Strategy: Management is actively engaging with the Missouri PSC regarding the weather normalization mechanism, with plans to address this in the upcoming rate case.
• Dividend Policy: The payout ratio is expected to remain in the 55% to 65% range, with dividends anticipated to grow alongside earnings.
• Divestiture Rationale: The decision to sell Spire Mississippi was driven by the subscale nature of the business and the need for significant capital investment, which would be better supported under a larger utility.

Overall, Spire Inc. reported solid earnings growth in Q2 2026, driven by strategic acquisitions and a focus on regulated utility operations. However, challenges related to weather impacts on customer usage and regulatory hurdles present headwinds that the company is actively addressing.