SR Q2 2026 Earnings Call Summary

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 a year ago.
Gas Utility Earnings: Increased to $235 million, a 20% rise driven by new rates in Missouri and Alabama.
Capital Expenditures (CapEx): $386 million in the first half of 2026, with a full-year expectation of $797 million.
Adjusted EPS Guidance for FY 2026: Revised range of $3.90 to $4.10 per share, reflecting lower 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: Agreements to sell Spire Marketing, Spire Storage, and Spire Mississippi to focus on core regulated gas utility operations. The sale of Spire Marketing was completed on April 30, 2026.
Regulatory Approvals: Received a $16.5 million increase in the Infrastructure System Replacement Surcharge (ISRS) in Missouri, effective March 2026.
Operational Focus: Emphasis on safe, reliable gas delivery, disciplined capital deployment, and customer affordability.

3. Forward Guidance and Outlook

Long-term Growth Target: Reaffirmed 5% to 7% adjusted EPS growth target.
Fiscal 2027 Adjusted EPS Guidance: Expected range of $5.40 to $5.60 per share, including contributions from Spire Tennessee.
Capital Investment: Committed to a 10-year capital plan of $11.2 billion, supporting regulated growth.

4. Bad News, Challenges, or Points of Concern

Weather-Related Usage Decline: Lower-than-expected customer usage in Missouri due to mild winter weather, leading to a margin shortfall.
Regulatory Challenges: Filed an accounting authority order (AAO) to recover lost margins due to weather impacts, with a hearing scheduled for September 9, 2026.
Increased Costs: Higher depreciation and other non-income taxes affecting earnings, alongside modestly higher interest expenses.
Divestiture Impact: While the sales of non-core assets are strategic, they indicate a need to streamline operations in a challenging market.

5. Notable Q&A Insights

Weather Normalization Strategy: Management is actively engaging with the Missouri Public Service Commission to address weather normalization issues, with potential discussions 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.
Growth Post-Divestitures: Transitioning to a fully regulated business model is expected to provide a more predictable growth trajectory, centered around rate base-driven recovery.
Mississippi Sale Rationale: The sale was driven by the subscale nature of the Mississippi operations and the need for capital investment, which would be better supported under a larger utility.

Overall, Spire Inc. reported solid earnings growth driven by its regulated gas utility business while facing challenges related to weather impacts and regulatory adjustments. The company remains focused on strategic divestitures and maintaining a disciplined approach to capital investment and operational excellence.

SR — Spire Inc.