Spire Inc (SR, Financial), a public utility holding company, reported its fiscal 2024 third-quarter results, showing a net loss of $12.6 million, or ($0.28) per diluted share, compared to a net loss of $21.6 million, or ($0.48) per share, a year ago. On a net economic earnings (NEE) basis, the company reported a loss of $4.3 million, or ($0.14) per share, compared to a loss of $18.6 million, or ($0.42) per share, a year ago.
Company Overview
Spire Inc is a public utility holding company with three reportable business segments: Gas Utility, Gas Marketing, and Midstream. The Gas Utility segment includes the regulated operations of Laclede Gas, Alabama Gas Corporation (Alagasco), and EnergySouth Inc. The Utilities businesses operations include the purchase, retail, distribution, and sale of natural gas in Missouri, Alabama, and Mississippi. The Gas Utility segment generates a majority of the company's revenue but is subject to seasonal fluctuations. The Gas Marketing segment includes Laclede Energy Resources, Inc, whose operations include the marketing of natural gas and related activities on a non-regulated basis, and the Midstream segment includes transportation and storage of natural gas.
Performance and Challenges
Spire Inc's performance in the third quarter showed improvement across all segments. The Gas Utility segment benefitted from new rates but faced higher depreciation and bad debt expenses. Gas Marketing earnings increased due to improved transportation margins, while Midstream earnings were favorable due to new storage capacity and the inclusion of MoGas and Salt Plains.
Despite these improvements, the company lowered its fiscal 2024 net economic earnings guidance range to $4.15-$4.25 per share from $4.25-$4.45, citing lower than expected Spire Missouri margin and higher interest expenses earlier in the year.
Financial Achievements
Spire Inc's financial achievements are crucial for the Utilities - Regulated industry, where stable and predictable earnings are highly valued. The company's initiative to improve long-term customer affordability by lowering overall costs and improving operational efficiency is expected to yield benefits in 2025 and 2026.
Income Statement Highlights
| Three Months Ended June 30 | 2024 | 2023 |
|---|---|---|
| Operating Revenues | $414.1 million | $418.5 million |
| Net Loss | ($12.6 million) | ($21.6 million) |
| Net Economic (Loss) Earnings | ($4.3 million) | ($18.6 million) |
Segment Performance
The Gas Utility segment reported a net economic loss of $11.0 million, an improvement from a loss of $12.3 million in the prior year. The Gas Marketing segment reported NEE of $1.0 million, compared to a loss of $2.5 million in the prior year. The Midstream segment reported NEE of $13.9 million, up from $3.6 million in the year-ago period.
Balance Sheet and Cash Flow
Spire Inc's balance sheet showed total assets of $10.71 billion as of June 30, 2024, compared to $10.31 billion as of September 30, 2023. The company's net utility plant increased to $6.10 billion from $5.78 billion over the same period.
Commentary
"Our results improved for the third quarter across all segments, and we maintained strong operational performance," said Steve Lindsey, president and chief executive officer of Spire. "This quarter, we launched a customer affordability initiative expected to lower our overall costs and improve operational efficiency, with realized benefits anticipated in 2025 and 2026."
Analysis
Spire Inc's third-quarter results indicate a positive trend in reducing losses and improving segment performance. The company's strategic initiatives to enhance operational efficiency and customer affordability are expected to provide long-term benefits. However, the lowered earnings guidance reflects ongoing challenges, including higher interest expenses and lower margins in certain segments.
For more detailed information, please refer to Spire Inc's 8-K filing.
Explore the complete 8-K earnings release (here) from Spire Inc for further details.
