Abstract

Northwest Natural Gas will report fiscal fourth-quarter results on February 27, 2026 Pre-Market; this preview summarizes last quarter’s performance, consensus expectations for revenue, margins, and EPS for the current quarter, and provides a structured scenario analysis of segment drivers and key watch items across its core regulated gas utility and adjacent water and energy services operations.

Market Forecast

For the quarter to be reported, Northwest Natural Gas is projected to deliver revenue of $420.04 million, implying year-over-year growth of 6.33%, with estimated EBIT of $104.27 million, up 25.88% year over year, and estimated EPS of $1.38, essentially stable year over year at an estimated 0.24% growth. While company-level guidance details on gross profit margin and net margin for the current quarter are not disclosed in the forecast dataset, the combination of modest top-line growth and stronger operating leverage reflected in the EBIT estimate suggests sequential improvement in profitability metrics relative to the seasonally weak prior quarter.

The company’s main business remains regulated natural gas utility service under Northwest Natural Gas Company, supported by a smaller but growing portfolio that includes water utility operations and energy services. The most promising near-term contribution outside the core utility appears to come from the regulated gas utility’s seasonal demand uplift and rate mechanisms; among non-core units, water utility revenue of $18.63 million last quarter stands out as a platform for incremental growth, though year-over-year data for that segment were not disclosed.

Last Quarter Review

In the preceding quarter, Northwest Natural Gas posted revenue of $164.73 million, a gross profit margin of 29.45%, a GAAP net loss attributable to the parent company of $29.89 million, a net profit margin of -18.14%, and an adjusted EPS of -$0.73, with year-over-year adjusted EPS improvement indicated by an actual growth rate of -2.82% (a smaller loss compared to the prior-year period). Quarter-on-quarter net profit attributable to the parent company declined by -1,095.60% due to seasonal factors and cost timing, consistent with the utility’s typical loss-making off-peak quarter. A key operational note is the company’s performance relative to expectations: last quarter’s revenue of $164.73 million was below the $174.99 million estimate, while adjusted EPS of -$0.73 beat the -$0.83 estimate, and EBIT of -$12.46 million was weaker than the -$7.85 million estimate, underscoring mixed execution in a seasonally slow period. By business lines last quarter, the regulated gas utility contributed $120.07 million, the water utility contributed $18.63 million, SiEnergy contributed $11.82 million, and other NW Holdings activities contributed $14.21 million; year-over-year growth by segment was not disclosed.

Current Quarter Outlook

Core Regulated Gas Utility

The core driver this quarter is the regulated natural gas distribution business, which typically exhibits strong seasonality due to winter heating load. The current-quarter revenue estimate of $420.04 million, up 6.33% year over year, implies a meaningful seasonal ramp from the prior quarter’s $164.73 million. The corresponding EBIT estimate of $104.27 million, up 25.88% year over year, indicates an expectation for operating leverage as throughput and margin recapture improve with colder temperatures and the benefit of approved rate mechanisms. Given the prior quarter’s gross margin of 29.45% and net margin of -18.14%, the market is implicitly forecasting a normalization toward positive net profitability in the high-demand season, with EPS expected at $1.38. Management’s execution on customer growth, cost pass-throughs, and timing of regulatory true-ups will be critical to achieving the margin recovery embedded in these forecasts. Key watch items include weather-normalized usage trends, bad debt and O&M cost controls, and the pace of capex conversion into rate base. Any unfavorable variance in degree days versus normal could weigh on volumes and erode the expected operating leverage, while constructive regulatory outcomes and routine trackers could help align revenues with rising cost inputs.

Water Utility and Adjacent Platforms

The water utility business remains a strategic adjacency with revenue of $18.63 million last quarter. Although explicit year-over-year growth metrics for the segment were not disclosed in the dataset, water utilities typically offer steady rate-base growth and diversification relative to gas throughput risk. This quarter, investors will look for steady customer additions and tariff progression in the water portfolio, as well as integration and scale efficiencies that can bolster margin stability. With the gas segment commanding the majority of consolidated earnings power in peak season, water’s direct contribution to EPS this quarter is expected to be modest, but the segment’s consistency can support consolidated volatility reduction and improve the quality of earnings over time. On the outlook, measured expansion via tuck-ins or organic projects can add incremental revenue visibility; however, timing of regulatory approvals and integration costs could affect near-term profitability.

SiEnergy and Other Holdings

SiEnergy contributed $11.82 million last quarter, while other NW Holdings activities added $14.21 million. These parts of the portfolio are comparatively small in revenue and earnings impact, but they can influence consolidated results via transaction costs, development expenses, and potential growth initiatives. This quarter’s consolidated forecast, featuring a disproportionately larger year-over-year gain in EBIT relative to revenue, suggests that non-core expense drag may be less pronounced in peak season, either from lower project-timing costs or improved contribution margins. For investors assessing sustainability, clarity on the cost cadence, project milestones, and any asset-level earnings inflection will be useful to gauge whether the EBIT uplift is primarily seasonal within the gas utility or broadened by better performance in smaller units.

Margin Trajectory and EPS Sensitivity

The current-quarter EPS estimate of $1.38 points to a return to profitability commensurate with seasonal heating demand, with estimated year-over-year EPS growth of 0.24%. Relative to the prior quarter’s net margin of -18.14%, the combination of a 6.33% revenue upswing and a 25.88% EBIT increase implies anticipated positive operating leverage, potentially supported by regulatory cost recovery and a more favorable sales mix. Gross margin for the quarter is not explicitly forecast in the dataset, but with winter demand and rate structures in place, investors should look for a sequential improvement from last quarter’s 29.45%. The principal sensitivities this quarter include actual weather versus normal, gas procurement cost timing, uncollectible expense trends, and customer growth. Upside to EPS would likely stem from colder-than-normal weather, tight O&M discipline, and benign credit losses; downside risks would include warmer weather, higher-than-expected maintenance costs, or delays in cost recovery mechanisms.

Revenue Quality and Regulatory Considerations

As a regulated utility, revenue quality is closely tied to tariff frameworks, decoupling mechanisms, and deferred-accounting structures that stabilize earnings against commodity price swings and volume volatility. The modeled 6.33% revenue increase and the 25.88% EBIT rise suggest supportive regulatory economics in the quarter, but transparency on deferral balances, true-up schedules, and any pending rate orders remains a focus. The prior quarter’s revenue shortfall versus estimates alongside an EPS beat signals that variance in cost phasing and regulatory accounting can materially affect period results. In the upcoming report, commentary on the trajectory of regulatory trackers, timing of recovery for prior-period costs, and any pending filings will help investors assess whether this quarter’s margin is sustainable into subsequent periods or more seasonal in nature.

Cash Flow and Capital Allocation Context

While free-cash-flow seasonality is typical for distribution utilities, the prior quarter’s net loss of $29.89 million underscores the off-peak pressure on earnings. This quarter’s expected EBIT and EPS rebound should bolster operating cash generation. Dividend continuity is a watch point; the company maintained its quarterly dividend at $0.4925 per share payable in February based on a January record date, indicating ongoing commitment to shareholder returns. Investors will monitor whether cash coverage improves in line with seasonal earnings and whether capex levels and financing plans remain consistent with targeted credit metrics. Any deviation from the anticipated operating cash recovery could have implications for forward dividend policy and funding mix.

What Could Move the Stock on Print

Three developments are most likely to influence the stock reaction. The first is the degree-day variance versus normal and the impact on volumes; an upside surprise in weather-adjusted usage could lift revenue above the $420.04 million estimate and expand EBIT beyond $104.27 million. The second is margin quality, including any updates on trackers, deferral amortization, or cost containment that help translate top-line growth into EPS; given last quarter’s EPS beat despite revenue softness, the market may reward evidence of disciplined O&M and favorable regulatory true-ups. The third is outlook commentary: while no explicit guidance is embedded in the dataset, investors will look for management’s qualitative tone on upcoming rate-case milestones, customer additions, and capital investment cadence. Clarity here can recalibrate expectations for the post-peak season quarters, which historically carry lower earnings.

Analyst Opinions

Within the January 1, 2026 to February 20, 2026 window, identifiable analyst previews or formal rating changes specific to Northwest Natural Gas were limited in publicly accessible channels. As a result, a clear bullish-versus-bearish ratio cannot be established from the collected items alone, and there is no demonstrable majority stance to present for that period. Dividend continuity at $0.4925 per share, announced for payment in February with a record date in late January, has been noted in market dispatches, which some investors interpret as an indicator of stable capital returns heading into the peak season. However, dividend actions do not substitute for formal analyst previews, and they do not reflect a directional rating bias on their own.

Given the scarcity of explicit previews or rating updates in the specified timeframe, the practical approach for investors is to anchor near-term expectations to the quantitative consensus from the forecast dataset: revenue of $420.04 million, EBIT of $104.27 million, and EPS of $1.38, suggesting modest top-line growth and a more constructive EBIT inflection. The key to any subsequent analyst stance will likely hinge on whether reported results confirm the magnitude of the EBIT improvement relative to revenue growth. A positive surprise on EBIT margin, coupled with reaffirmed cost recovery and manageable O&M, could catalyze more constructive commentary. Conversely, a miss on revenue relative to the 6.33% year-over-year growth assumption, or weaker-than-expected operating leverage, could prompt cautious tones in post-earnings notes.

In absence of a dominant pre-earnings institutional narrative during the covered period, the market’s reference point remains the model-derived expectations outlined above. Post-release commentary will likely coalesce around weather-normalized performance, regulatory cost recovery timing, and the durability of margin gains into shoulder seasons, which together will determine whether sentiment tilts more bullish or bearish after the print.