Core Insights - Atos Group is enhancing its management team with four senior executive appointments to support its transformation plan aimed at restoring sustainable profitable growth and creating long-term value for stakeholders [1][2][3] Group Management Changes - Florin Rotar has been appointed as EVP, Group Chief Technology Officer, bringing over 20 years of experience in AI and emerging technologies to help Atos become a global AI-powered technology partner [3][4] - Laurent Soulier is appointed as EVP, Strategy and Operational Excellence, with a background in cybersecurity and digital transformation programs in both public and private sectors [5][6] - Pénélope de Fouquières takes on the role of SVP in charge of Communication, leveraging her 20 years of experience in corporate communications and brand development [7] - Camille le Provost is appointed as Head of M&A, recognized for her expertise in managing complex international transactions [8][9] Company Overview - Atos Group operates with approximately 70,000 employees and generates annual revenue of around €10 billion, providing services under the Atos brand and products under the Eviden brand [11] - The company is a leader in cybersecurity, cloud, and high-performance computing, committed to a secure and decarbonized future [11][12]

Core Viewpoint - Atmos Energy (ATO) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Developments for Atmos Energy - Atmos is projected to earn $7.33 per share for the fiscal year ending September 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Atmos has increased by 2.4%, reflecting a positive trend in earnings estimates [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating [9][10]. - The upgrade of Atmos to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Industry Overview - Natural gas is increasingly utilized in power generation due to its cleaner-burning characteristics compared to other fossil fuels, leading to a rise in domestic natural gas output and greater LNG exports [1] - The demand for natural gas across various consumer categories necessitates the installation of more distribution pipelines [1][2] Natural Gas Distribution Infrastructure - The U.S. natural gas network comprises nearly 3 million mainline and other pipes, essential for transporting natural gas from transmission networks to end users [2] - The natural gas pipeline industry requires a consistent flow of funds for the repair and maintenance of its extensive network and to address aging infrastructure [3] Production and Market Trends - According to the U.S. Energy Information Administration, dry natural gas production increased by over 1 billion cubic feet per day from Q1 to Q2 of 2025, but is expected to decline by a similar amount in the following year [4] - Marketed natural gas production is projected to grow by 3% over 2024 volumes [4] Company Comparisons - A comparative analysis of Atmos Energy (ATO) and Northwest Natural (NWN) shows both companies currently hold a Zacks Rank 2 (Buy) [5] - The Zacks Consensus Estimate for ATO's fiscal 2025 EPS has risen by 1% to $7.33, while NWN's EPS estimate increased by 1.4% to $2.92 [6][10] Financial Metrics - ATO's return on equity (ROE) is 9%, while NWN's ROE is 8.6%, compared to the industry average of 9.08% [7] - ATO has a current ratio of 1.37, indicating sufficient short-term assets to cover liabilities, whereas NWN's current ratio is 0.68 [8] - ATO's debt-to-capital ratio stands at 40.21%, significantly lower than NWN's 62.05% and the industry average of 51.09% [11] Stock Performance - In the past month, ATO shares have increased by 7%, outperforming NWN's 2% rise and the industry's 3.9% growth [10][12] - ATO's dividend yield is 2.1%, while NWN's is 4.74%, both exceeding the S&P 500 composite average of 1.15% [14] Conclusion - Both Atmos Energy and Northwest Natural are positioned as strong investment options, with ATO being favored due to its superior debt management, liquidity, and stock performance [15]

Group 1 - The utilities sector is showing signs of potential overbought conditions, particularly for two stocks, PG&E Corp and Atmos Energy Corp, which may concern momentum-focused investors [1][2] - The Relative Strength Index (RSI) is a key momentum indicator, with values above 70 indicating overbought conditions [2] Group 2 - PG&E Corp reported disappointing quarterly earnings on July 31, despite a 16% stock increase over the past month, with an RSI value of 73 and current trading price of $15.48 [7] - Atmos Energy Corp exceeded Q3 financial expectations and raised its FY25 EPS guidance, with a stock increase of around 6% over the past five days, an RSI value of 70.8, and current trading price of $165.64 [7]

Core Insights - Atos has been recognized as a Leader in ISG's Provider Lens™ Mainframes – Services and Solutions in Europe for the fourth consecutive year, reinforcing its strong market position and expertise in mainframe services [1][2] Group 1: Market Position and Recognition - Atos has been named a Leader in four quadrants: Mainframe Optimization Services, Application Modernization Services, Mainframe as a Service (MFaaS), and Mainframe Operations, showcasing its comprehensive service offerings [1][2] - ISG has elevated Atos from a Product Challenger to a Leader in the Mainframe Optimization Services quadrant, highlighting its decades of mainframe experience and innovative AI modernization capabilities [3] Group 2: Service Offerings - In the Application Modernization Services quadrant, Atos is recognized for its risk-averse modernization approach and secure migration framework, integrating GenAI into its modernization efforts [4] - Atos stands out in the MFaaS quadrant for its tailored migration strategies and hybrid environment support, combining IBM expertise with cloud-aligned scalability [5] - The Mainframe Operations quadrant assessment emphasizes Atos' focus on automation, cost efficiency, and hybrid IT integration in its operations services [6] Group 3: Company Background - Atos Group operates globally with approximately 70,000 employees and annual revenue of around €10 billion, positioning itself as a leader in digital transformation and cybersecurity [8][9] - The company is committed to a secure and decarbonized future, providing AI-powered, end-to-end solutions across various industries [9][10]

Financial Data and Key Metrics Changes - For fiscal year to date 2025, the company reported net income of $1 billion or $6.4 per diluted share, with updated earnings per share guidance ranging from $7.35 to $7.45 [3][10] - Consolidated capital spending increased by 22% to $2.6 billion, with 86% dedicated to improving safety and reliability [13][14] - Operating income increased by $322 million due to regulatory outcomes, with residential customer growth contributing an additional $22 million [10][14] Business Line Data and Key Metrics Changes - The pipeline and storage segment saw revenue increase by $12.5 million primarily due to increased throughput [10] - The distribution segment experienced strong residential and industrial customer growth, adding nearly 58,000 new residential customers and 22 new industrial customers with an anticipated annual load of approximately 3.4 Bcf [4][5] Market Data and Key Metrics Changes - Texas added over 198,000 jobs in the last twelve months, reflecting a 1.4% annual growth rate, which supports the demand for natural gas [4] - The company achieved a 97% customer satisfaction rating, indicating strong customer service performance [6] Company Strategy and Development Direction - The company is focused on modernizing natural gas distribution, transmission, and storage systems while expanding customer service [3][6] - Recent Texas legislation allows for increased capital spending deferral treatment, which is expected to enhance financial flexibility and support future growth [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the role of natural gas in economic development and anticipates continued customer growth [4][6] - The company expects earnings per share to grow at a rate of 6% to 8% annually, with a full update on the five-year plan to be provided in November [16] Other Important Information - The company has been recognized as the most trusted brand in 2025 among U.S. utility companies, reflecting its strong reputation in the market [7] - The company finished the third fiscal quarter with an equity capitalization of 60% and approximately $5.5 billion in liquidity [15] Q&A Session Summary Question: Clarification on the $0.10 increase from Texas legislation - The $0.10 reflects the impact of legislation from June 20 through the end of fiscal 2025, effectively one quarter [21] Question: Inquiry about the through system commentary - The company anticipates a more normal operating environment for fiscal 2026, adjusting based on market conditions [23][24] Question: Capital outlay for the data center project in Abilene - The company continues to receive inquiries for projects across its service territory, with updates to be provided once contracts are signed [30] Question: Clarification on the percentage of capital spending eligible for deferral - The 80% figure refers to Atmos as a whole, with the majority of the increase associated with APT's investments [32] Question: Impact of stronger operating cash flow on future financing - The company plans to finance future growth using a balanced mix of equity and long-term debt, anticipating increased operating cash flow [41]

Financial Data and Key Metrics Changes - For fiscal year to date 2025, the company reported net income of $1 billion or $6.4 per diluted share, with updated earnings per share guidance ranging from $7.35 to $7.45 [3][11] - Operating income increased by $322 million due to regulatory outcomes, with residential customer growth and rising industrial load contributing an additional $22 million [11][12] - Consolidated capital spending rose by 22% to $2.6 billion, with 86% dedicated to improving safety and reliability [13][15] Business Line Data and Key Metrics Changes - The pipeline and storage segment saw revenue increases of $12.5 million primarily due to increased throughput [11] - The distribution segment experienced strong residential customer growth, adding nearly 58,000 new residential customers year to date, with approximately 45,000 in Texas [4][11] - Industrial demand remained robust, with 22 new industrial customers added year to date, expected to generate an annual load of approximately 3.4 Bcf [5][11] Market Data and Key Metrics Changes - Texas added over 198,000 jobs in the last twelve months, reflecting a 1.4% annual growth rate, which supports the demand for natural gas [4] - The company achieved a 97% customer satisfaction rating, indicating strong customer service performance [7] Company Strategy and Development Direction - The company is focused on modernizing its natural gas distribution, transmission, and storage systems while ensuring reliable service to 3.4 million customers across eight states [3] - Recent Texas legislation (House Bill 4384) allows for increased deferral treatment of capital spending, which is expected to enhance financial flexibility and support future growth [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing role of natural gas in economic development and anticipates continued customer growth [4][6] - The company expects earnings per share to grow at a rate of 6% to 8% annually, with a full update on the five-year plan to be provided in November [17] Other Important Information - The company has been recognized as the most trusted brand in 2025 by Eskom, reflecting its strong reputation among customers [8] - The company finished the third quarter with an equity capitalization of 60% and approximately $5.5 billion in liquidity [16] Q&A Session Summary Question: Clarification on the $0.10 increase from Texas legislation - Management clarified that the $0.10 reflects the impact of the legislation from June 20 through the end of fiscal 2025, effectively one quarter [22] Question: Inquiry about the through system commentary - Management indicated that they expect a more normal operating environment for fiscal 2026, with adjustments based on market conditions [25][26] Question: Capital outlay for the data center project in Abilene - Management noted ongoing inquiries for similar projects across their service territory, with updates to be provided once contracts are signed [30][32] Question: Clarification on the percentage of capital spending eligible for deferral - Management confirmed that the 80% figure applies to Atmos as a whole, with most of the increase related to APT's investments [34] Question: Impact of stronger operating cash flow on financing future growth - Management stated that they will continue to finance growth using a balanced mix of equity and long-term debt, anticipating increased operating cash flow [42]

Financial Performance - The company increased its fiscal 2025 indicated annual dividend by 8.1% to $3.48 per diluted share[3] - Year-to-date diluted EPS reached $6.40[6] - The company raised its fiscal 2025 EPS guidance range to $7.35 to $7.45, up from $7.20 to $7.30[6] - Net income for the three months ended June 30, 2025, was $186 million, compared to $166 million for the same period in 2024[7] - Capital expenditures year-to-date totaled $2.6 billion, with 86% allocated to safety and reliability spending[6] Financing and Liquidity - The company issued $650 million in 30-year senior notes at 5.00% and $500 million in 10-year senior notes at 5.20%[6] - The company settled $569 million of equity forwards[6] - Available liquidity stood at approximately $5.5 billion[6] - $1.7 billion was available under equity forward agreements[6, 21] Regulatory and Rate Adjustments - Implemented $350.8 million in rate adjustments as of August 6, 2025[6] - Approved annualized operating income increases totaled $350.8 million, with $229.1 million currently in progress[6, 34] - The company implemented a GRIP filing for Atmos Pipeline - Texas (APT), authorizing an increase in annual operating income of $77.2 million[33, 51]

Core Insights - Atmos Energy (ATO) reported third-quarter fiscal 2025 earnings of $1.16 per share, slightly missing the Zacks Consensus Estimate of $1.17 by 0.85%, but showing a year-over-year increase of 7.4% from $1.08 [1][8] - Total revenues reached $838.8 million, falling short of the Zacks Consensus Estimate of $938 million by 10.6%, yet reflecting a significant increase of 19.6% from the previous year's $701.5 million [2][8] Revenue Breakdown - Distribution segment net income was $70 million, marking a 6.1% increase from $66 million in the same quarter last year [3] - Pipeline and Storage segment income amounted to $116 million, representing a 16% increase from $100 million reported in the year-ago quarter [3] Operational Highlights - Operation and maintenance expenses were $222.1 million, up 5.1% from the prior year's level [4] - Operating income totaled $252.1 million, reflecting a 14.4% increase from the year-ago figure [4] - Interest expenses incurred were $41.5 million, a slight increase of 0.7% from the previous year [4] - Consolidated distribution throughput for the quarter was 75.4 million cubic feet, up 4% from the year-ago quarter [4] Financial Position - As of June 30, 2025, Atmos Energy reported approximately $5.5 billion in available liquidity [5] - Cash and cash equivalents stood at $709.4 million, a significant increase from $307.3 million as of September 30, 2024 [5] - Net cash flow from operating activities for the first nine months of fiscal 2025 was $1.7 billion, compared to $1.4 billion in the same period last year [5] Capital Expenditure and Guidance - In the first nine months of fiscal 2025, the company invested nearly $2.6 billion, with 86% allocated for enhancing the safety and reliability of its distribution and transportation systems [6] - Atmos Energy raised its fiscal 2025 earnings guidance to a range of $7.35-$7.45 per share, up from the previous guidance of $7.20-$7.30 [7][8] - Total net income is now expected to be between $1.185 billion and $1.205 billion, compared to earlier guidance of $1.15 billion to $1.17 billion [9] - The company anticipates fiscal 2025 capital expenditures to be $3.7 billion [9]

Core Viewpoint - Atmos Energy reported quarterly earnings of $1.16 per share, missing the Zacks Consensus Estimate of $1.17 per share, but showing an increase from $1.08 per share a year ago, indicating a slight earnings surprise of -0.85% [1] - The company posted revenues of $838.77 million for the quarter, missing the Zacks Consensus Estimate by 10.55%, compared to $701.55 million in the same quarter last year [2] Group 1: Earnings Performance - Atmos Energy's earnings for the quarter were $1.16 per share, which is lower than the expected $1.17 per share, but higher than the previous year's $1.08 per share [1] - The company has surpassed consensus EPS estimates three times over the last four quarters [2] - The earnings surprise for the last quarter was -0.85%, while the previous quarter had a positive surprise of +3.77% [1][2] Group 2: Revenue Analysis - The reported revenue of $838.77 million for the quarter was below the consensus estimate by 10.55% and higher than the $701.55 million from the previous year [2] - Atmos Energy has only topped consensus revenue estimates once in the last four quarters [2] Group 3: Stock Performance and Outlook - Atmos shares have increased approximately 12.5% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $886.32 million, and for the current fiscal year, it is $7.27 on revenues of $4.8 billion [7] Group 4: Industry Context - The Utility - Gas Distribution industry, to which Atmos belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Atmos's stock performance [5][6]