Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Spire Inc (NYSE:SR) reported an increase in adjusted earnings per share to $3.60 from $3.45 year-over-year, driven by strong growth in utility and midstream segments.
• The company is reaffirming its long-term EPS growth target of 5 to 7%, supported by a $7.4 billion capital investment plan over 10 years.
• Spire Inc (NYSE:SR) successfully renewed a three-year labor agreement with the local 548 union, providing stability to its workforce.
• The Missouri Public Service Commission staff recommended a $19 million revenue increase in Spire's infrastructure system replacement surcharge request.
• Spire Inc (NYSE:SR) increased its fiscal 2025 capital investment target by $50 million to $840 million, indicating a commitment to infrastructure improvement and growth.

Negative Points

• Spire Inc (NYSE:SR) faced challenges with weather-related margin headwinds, leading to a $9 million reduction in expected margins for residential customers.
• The company's gas marketing segment experienced slightly lower results due to reduced market volatility.
• Higher corporate costs were reported, primarily due to increased borrowing balances.
• The proposed revenue increase in the Missouri rate case differs from Spire's request, with a lower return on equity and equity layer proposed by the PSC staff.
• Spire Inc (NYSE:SR) is facing challenges with the weather mitigation mechanism in Missouri, which has been ineffective in aligning revenues with usage.

Q & A Highlights

• Warning! GuruFocus has detected 14 Warning Signs with SR.

Q: Can you elaborate on the segment guidance and share count trends for the full year? A: Adam Woodard, CFO: We observed margin weakness in Missouri, prompting a guidance reduction. However, midstream exceeded expectations, allowing us to adjust upwards. As we move into summer, we anticipate strong performance from midstream and marketing segments.

Q: Is the weather-related margin the main deviation on the utility side? A: Adam Woodard, CFO: Yes, the primary driver is the weather-related margin. There are a few other minor factors, but the weather impact is the most significant.

Q: Regarding the midstream guidance increase, is this a one-off for 2025, or do you see a higher run rate going forward? A: Adam Woodard, CFO: While there is some optimization involved, we are seeing better capacity and pricing, indicating a potential run rate lift over time, though not entirely.

Q: Could you elaborate on the weather mechanism and its path forward within the rate case? A: Adam Woodard, CFO: The weather mechanism is a key issue in the rate case. We are in a good position to discuss this with stakeholders and aim to address and fix the current issues.

Q: What are your thoughts on the prospects for a settlement within the rate case? A: Scott Doyle, CEO: It's early in the process, but we are open to settlement discussions. The commission has shown a trend towards settlements, and we are willing to engage in collaborative discussions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.