Group 1 - The company focuses on timely dividend-paying stocks to assist investors in wealth accumulation [1] - The author has extensive experience as a Registered Investment Advisor and has published multiple investment-related books [1] - The company aims to provide a steady pace of financial growth for its clients through various investment strategies [1] Group 2 - The author has a background in corporate management, having worked at Georgia-Pacific Corp for 15 years before starting their own ventures [1] - The company has a history of involvement in small business advisory roles, including an appointment by President Ronald Reagan [1] - The investment newsletter emphasizes the importance of personal investment planning and stock market analysis [1]

Financial Data and Key Metrics Changes - For the fiscal year to date, the company reported a net income of $837 million, or $5.26 per diluted share, reflecting a 6.7% increase over the prior year period [4][10] - Operating income increased to $1.1 billion, representing a 14.6% increase for the first six months of the fiscal year [10] - The fiscal year 2025 earnings per share guidance was updated to a range of $7.2 to $7.3, up from the previous range of $7.05 to $7.25 [4][17] Business Line Data and Key Metrics Changes - Rate increases in both operating segments totaled $185 million, contributing to operating income growth [11] - Revenues in the Pipeline and Storage segment increased by $11.4 million, driven by a 10% increase in volumes transported [11] - The company added nearly 59,000 new customers year to date, with approximately 46,000 of those in Texas [5] Market Data and Key Metrics Changes - Texas added jobs at a faster rate than the national average, with nearly 192,000 jobs added over the last twelve months, representing a 1.4% annual growth rate [5] - Industrial demand for natural gas remained strong, with the addition of nine new industrial customers during the second quarter [6] Company Strategy and Development Direction - The company is focused on modernizing its natural gas distribution, transmission, and storage systems while providing reliable service to 3.4 million customers across eight states [4] - Ongoing projects include the installation of new pipelines to support growth in the DFW Metroplex, enhancing safety, reliability, and supply diversification [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance, citing robust growth driven by favorable employment trends in Texas [4] - The company anticipates that the remaining contribution to fiscal year 2025 earnings per share will be recognized somewhat evenly by quarter in the back half of the fiscal year [17][18] Other Important Information - The company has extended its credit facilities totaling $3.1 billion and had $5.3 billion in available liquidity at quarter end [17] - The company is actively monitoring legislative developments across its operating states, which could impact its business [47][48] Q&A Session Summary Question: Is the higher guidance for 2025 a fair base to think about growth going forward? - Management indicated that they will assess market conditions before finalizing fiscal year 2026 plans, acknowledging current market volatility [26] Question: How are you thinking about the higher O&M this year and any efforts to derisk 2026? - Management noted that some of the higher O&M for 2025 could be a pull forward from 2026, emphasizing proactive maintenance and compliance efforts [27][28] Question: Can you update us on the equity financing for the rest of the year? - Management confirmed that their financing strategy remains balanced, utilizing a combination of equity and long-term debt, with equity needs anticipated for fiscal years 2025 and 2026 [37] Question: Can you discuss any quantifiable backlog of projects? - Management clarified that while there is no backlog per se, they are focused on high-priority projects and scheduled work based on reliability and safety [40][42] Question: What key bills are being monitored that could benefit your business? - Management is monitoring various legislative sessions and bills but refrained from making predictions until final decisions are made [47][48] Question: Should the new EPS guidance midpoint be used as the new EPS base for calculating the five-year CAGR? - Management indicated that using the new EPS guidance midpoint as a base for calculations is a safe assumption [49][50] Question: What are the underlying growth assumptions for APT expansion projects? - Management explained that growth assumptions are based on city models and anticipated demand, with ongoing reviews to adjust plans as necessary [69][71]

Financial Data and Key Metrics Changes - For the fiscal year to date, the company reported a net income of $837 million, or $5.26 per diluted share, reflecting a 6.7% increase over the prior year period [2][9] - Operating income increased to $1.1 billion, representing a 14.6% increase for the first six months of the fiscal year [9] - The fiscal year 2025 earnings per share guidance was updated to a range of $7.2 to $7.3, up from a previous range of $7.05 to $7.25 [15][16] Business Line Data and Key Metrics Changes - Rate increases in both operating segments totaled $185 million, contributing to the operating income growth [10] - Revenues in the Pipeline and Storage segment increased by $11.4 million, reflecting a 10% increase in volumes transported across the system [10] - The company added nearly 59,000 new customers year to date, with approximately 46,000 of those in Texas [4] Market Data and Key Metrics Changes - Texas added jobs at a faster rate than the nation, with nearly 192,000 jobs added over the last twelve months, representing a 1.4% annual growth rate [4] - Industrial demand for natural gas remained strong, with nine new industrial customers added during the second quarter, expected to have an annual load of approximately 8 Bcf [5] Company Strategy and Development Direction - The company is focused on modernizing its natural gas distribution, transmission, and storage systems while safely providing reliable service to 3.4 million customers across eight states [3] - Ongoing projects include the installation of approximately 44 miles of pipe to support growth in the DFW Metroplex, expected to be completed by the end of the calendar year [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiscal year 2025 performance, attributing it to the strength of APT's three-system business and favorable market conditions [16] - The company anticipates O&M expenses to be in the range of $860 million to $880 million, with a significant portion of the year-over-year increase already recognized [17] Other Important Information - The company has extended its credit facilities totaling $3.1 billion and had $5.3 billion in available liquidity at quarter end [15] - The company is monitoring legislative developments across its operating states, with potential implications for its business [44] Q&A Session Summary Question: Is the higher guidance for 2025 a fair base to think about growth going forward? - Management indicated that they will assess market conditions before releasing fiscal year 2026 guidance, acknowledging current market volatility [22][23] Question: How are you thinking about the higher O&M this year and any efforts to derisk 2026? - Management noted that some of the higher O&M for 2025 may be a pull forward from 2026, emphasizing proactive maintenance and compliance efforts [24][25] Question: Can you update us on the equity financing for the rest of the year? - Management confirmed that their financing strategy remains balanced, utilizing a combination of equity and long-term debt, with equity needs anticipated for fiscal years 2025 and 2026 [34] Question: What are some of the key bills you are monitoring legislatively? - Management is monitoring various bills across their eight states but refrained from making predictions until the legislative process is complete [44][45] Question: What are the underlying growth assumptions for APT expansion projects? - Management explained that growth assumptions are based on population increases and anticipated capacity requirements, with ongoing reviews to adjust plans as necessary [65][66]

Atmos Energy (ATO) posted second-quarter fiscal 2025 earnings of $3.03 per share, which surpassed the Zacks Consensus Estimate of $2.92 by 3.8%. The bottom line also improved 6.3% from the year-ago quarter’s $2.85. (See the Zacks Earnings Calendar to stay ahead of market-making news.)ATO’s RevenuesTotal revenues of $1.95 billion beat the Zacks Consensus Estimate of $1.9 billion by 2.7%. The top line also increased 18.1% from the year-ago quarter’s reported number of $1.65 billion. ATO’s Segmental RevenuesDi ...

Financial Performance - The company increased its fiscal year 2025 indicated annual dividend by 8.1% to $3.48 per diluted share[3] - Year-to-date diluted EPS reached $5.26[6] - The company raised its fiscal year 2025 EPS guidance range from $7.05-$7.25 to $7.20-$7.30[6] - Q2 2025 net income was $486 million, compared to $432 million in Q2 2024[8] - Capital expenditures year-to-date totaled $1.7 billion, with 85% allocated to safety and reliability spending[6] Financing and Liquidity - The company issued $650 million in 30-year senior notes at a 5.00% interest rate[6] - The company settled $380 million of equity forwards[6] - Available liquidity stood at approximately $5.3 billion[6] - Equity capitalization was at 61% as of March 31, 2025[6] Regulatory and Rate Activity - Implemented $153.2 million in approved annualized operating income increases as of May 7, 2025[6] - $389.1 million in annualized operating income increases are currently in progress[6] - Mid-Tex Cities filed a Rate Review Mechanism (RRM) requesting an increase of $165.0 million in annual operating income[62] Outlook - The company anticipates total net income between $1.15 billion and $1.17 billion for fiscal year 2025[43] - Capital spending is projected to be approximately $3.7 billion for fiscal year 2025[43] - The effective tax rate is expected to be between 18% and 20% for fiscal year 2025[45]

Analyst's Disclosure: I/we have a beneficial long position in the shares of ATO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Shares of Atmos Energy (NYSE: ATO ) have been an excellent performer over the past year, gaining 35%. I view ATO as one of the safest, highest- ...

Core Insights - Atmos Energy reported revenue of $1.95 billion for the quarter ended March 2025, marking an 18.4% increase year-over-year [1] - The company's EPS was $3.03, up from $2.85 in the same quarter last year, exceeding the consensus estimate of $2.92 by 3.77% [1] Financial Performance - The revenue of $1.95 billion surpassed the Zacks Consensus Estimate of $1.9 billion, resulting in a surprise of +2.72% [1] - Operating revenues from the Pipeline and Storage segment reached $259 million, exceeding the estimated $246.48 million, reflecting a +15.9% change year-over-year [4] - Operating revenues from the Distribution segment were $1.88 billion, compared to the estimated $1.65 billion, representing an +18.5% change year-over-year [4] - Operating income for the Pipeline and Storage segment was $145.22 million, slightly above the estimated $143.58 million [4] - Operating income for the Distribution segment was $483.72 million, compared to the average estimate of $469.03 million [4] Stock Performance - Atmos shares have returned +10.3% over the past month, closely trailing the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Atmos Energy (ATO) reported quarterly earnings of $3.03 per share, exceeding the Zacks Consensus Estimate of $2.92 per share, and up from $2.85 per share a year ago, representing an earnings surprise of 3.77% [1] - The company posted revenues of $1.95 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.72%, compared to $1.65 billion in the same quarter last year [2] - Atmos shares have increased approximately 16.3% since the beginning of the year, contrasting with a -4.7% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $954.77 million, and for the current fiscal year, it is $7.19 on revenues of $4.78 billion [7] - The estimate revisions trend for Atmos is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Utility - Gas Distribution industry, to which Atmos belongs, is currently ranked in the top 15% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Another company in the same industry, Sempra (SRE), is expected to report quarterly earnings of $1.21 per share, reflecting a year-over-year decline of 9.7%, with revenues anticipated at $3.85 billion, up 5.7% from the previous year [9][10]

Tax and Regulatory Matters - The effective tax rates for the three months ended March 31, 2025, and 2024 were 19.5% and 15.7%, respectively, while for the six months ended March 31, 2025, and 2024, they were 19.0% and 15.3%[77]. - As of March 31, 2025, the regulatory excess net deferred tax liability was $178.6 million, with $115.5 million being returned to customers over 12 - 60 months[78]. - Atmos Energy implemented ratemaking regulatory actions that resulted in an increase in annual operating income of $152.6 million, with ongoing efforts seeking an additional increase of $224.7 million[118]. - The company is seeking $147.5 million in increased annual operating income through various ratemaking efforts as of March 31, 2025[139]. - The company made a GRIP filing on February 26, 2025, requesting an increase in operating income of $77.2 million for capital costs incurred in 2024[149]. - The demand fee for the Louisiana natural gas transmission pipeline is set to increase by 5% annually until September 30, 2027, as approved by the Louisiana Public Service Commission[150]. Financial Performance - For the six months ended March 31, 2025, Atmos Energy recorded net income of $837.4 million, or $5.26 per diluted share, compared to $743.3 million, or $4.93 per diluted share for the same period in 2024, reflecting a 13% year-over-year increase in net income[116]. - The increase in net income was primarily driven by positive rate outcomes from safety and reliability spending, partially offset by higher bad debt expense, depreciation, property tax expenses, and increased operating expenses[117]. - Net income for the six months ended March 31, 2025, was $620,856 thousand, an increase of $56,727 thousand from $564,129 thousand in the same period of 2024[132]. - The company reported a net income of $216.6 million for the six months ended March 31, 2025, an increase of $37.4 million compared to $179.2 million for the same period in 2024[154]. - Operating revenues for the distribution segment increased to $1,882,528 thousand for the three months ended March 31, 2025, compared to $1,589,181 thousand in the same period of 2024, reflecting a change of $293,347 thousand[128]. - Total operating revenue of $514.4 million for the six months ended March 31, 2025, an increase of $79.7 million compared to $434.7 million for the same period in 2024[154]. Capital Expenditures and Investments - The company anticipates capital expenditures of approximately $24 billion between fiscal years 2025 and 2029, with over 80% dedicated to safety and reliability[113]. - Capital expenditures for the six months ended March 31, 2025, were $1,730.9 million, with approximately 85% invested to enhance safety and reliability of distribution and transportation systems[119]. - Cash used for investing activities was $1,717.54 million for the six months ended March 31, 2025, compared to $1,409.26 million in the prior year, reflecting an increase of $308.27 million[166]. Debt and Liquidity - The carrying amount of Atmos Energy's long-term debt as of March 31, 2025, was $8.435 billion, with a fair value of $7.569 billion[101]. - The company completed approximately $1.0 billion of long-term debt and equity financing during the six months ended March 31, 2025[120]. - Total liquidity as of March 31, 2025, was approximately $5.3 billion, including $543.5 million in cash and cash equivalents[120]. - The company has a $1.5 billion commercial paper program and $3.1 billion in total availability from committed revolving credit facilities to support liquidity needs[155]. - Total capitalization as of March 31, 2025, included long-term debt of $8,425.44 million (39.1%) and shareholders' equity of $13,137.97 million (60.9%), totaling $21,563.40 million[161]. - The company maintained compliance with all debt covenants as of March 31, 2025[175]. Commodity and Interest Rate Management - For the 2024-2025 heating season, the company hedged approximately 24.0 Bcf of winter flowing gas requirements, representing about 25-50% of anticipated heating season gas purchases[82]. - As of March 31, 2025, the company had 4,017 MMcf of net long commodity contracts outstanding, which have not been designated as hedges[87]. - The net loss on settled interest rate agreements for the three months ended March 31, 2025, was $(5.1) million, compared to $(3.2) million for the same period in 2024[90]. - As of March 31, 2025, the company had $387.0 million of net realized gains in accumulated other comprehensive income (AOCI) associated with interest rate agreements[93]. - The total financial instruments on the balance sheet as of March 31, 2025, included $123.2 million in assets and $(561,000) in liabilities[89]. - The company manages interest rate risk by entering into financial instruments to fix the Treasury yield component of anticipated financings[83]. Customer and Service Metrics - Atmos Energy serves over 3.3 million customers across eight states, focusing on regulated natural gas distribution and pipeline operations[110]. - The total number of meters in service increased to 3,417,134 as of March 31, 2025, compared to 3,367,671 a year earlier[181]. - Total gas sales volumes for the six months ended March 31, 2025, were 215,077 MMcf, slightly up from 214,253 MMcf in the same period of 2024[181]. Market Risk and Financial Instruments - The company’s financial instruments include $123.209 million in financial instruments classified under Level 2 and Level 3 fair value measurements[98]. - The fair value of financial instruments at March 31, 2025, was $122.65 million, reflecting changes in value from previous periods[179]. - There were no material changes in the concentration of credit risk during the six months ended March 31, 2025[102]. - No material changes in quantitative and qualitative disclosures about market risk during the six months ended March 31, 2025[183]. - Information regarding market risk is disclosed in Item 7A of the Annual Report on Form 10-K for the fiscal year ended September 30, 2024[183].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 May 7, 2025 Date of Report (Date of earliest event reported) ATMOS ENERGY CORPORATION (Exact Name of Registrant as Specified in its Charter) Texas and Virginia 1-10042 75-1743247 --------------------------------- ------------------------ ---------------------- (State or Other Jurisdiction (Commission File (I.R.S. Employer of Incorporation) Num ...