A month has gone by since the last earnings report for ONE Gas (OGS) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is ONE Gas due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.ONE Gas Q4 Earnings Beat Estim ...

Company Overview - ONE Gas (OGS) is based in Tulsa and operates in the Utilities sector, specifically in natural gas distribution [3] - The company's shares have experienced a price change of 11.63% this year [3] Dividend Information - ONE Gas currently pays a dividend of $0.68 per share, resulting in a dividend yield of 3.15%, which is higher than the Utility - Gas Distribution industry's yield of 2.75% and the S&P 500's yield of 1.43% [3] - The annualized dividend of ONE Gas is $2.72, reflecting a 1.5% increase from the previous year [4] - Over the past 5 years, ONE Gas has increased its dividend 5 times, achieving an average annual increase of 4.53% [4] - The current payout ratio for ONE Gas is 60%, indicating that the company pays out 60% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for ONE Gas's earnings in 2026 is projected to be $4.72 per share, which represents a year-over-year earnings growth rate of 5.36% [5] Investment Considerations - ONE Gas is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [6] - The company is positioned well for income investors, especially compared to high-growth firms that typically do not offer dividends [6]

Core Viewpoint - ONE Gas, Inc. will participate in multiple upcoming investor conferences, showcasing its commitment to engaging with the investment community and providing updates on its operations and financial performance [1]. Group 1: Conference Participation - ONE Gas will attend the UBS Midwest Utilities Conference on February 25, 2026, in Chicago, Illinois [1]. - The company will also participate in the Morgan Stanley Energy and Power Conference on March 2, 2026, and the Jefferies Power, Energy, Clean Energy and Utilities Conference on March 3, 2026, both in New York City [1]. - Senior executives Curtis Dinan and Christopher Sighinolfi will represent the company at all three conferences [1]. Group 2: Company Overview - ONE Gas is a 100-percent regulated natural gas utility, trading on the New York Stock Exchange under the symbol "OGS" [1]. - The company is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States [1]. - ONE Gas serves over 2.3 million customers across Kansas, Oklahoma, and Texas, with divisions including Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service [1].

Company Overview - ONE Gas (OGS) is based in Tulsa and operates in the Utilities sector, specifically in natural gas distribution. The company's shares have experienced a price change of 10.7% this year [3]. Dividend Information - ONE Gas currently pays a dividend of $0.68 per share, resulting in a dividend yield of 3.18%, which is higher than the Utility - Gas Distribution industry's yield of 2.72% and the S&P 500's yield of 1.36% [3]. - The annualized dividend of ONE Gas is $2.72, reflecting a 1.5% increase from the previous year. Over the past five years, the company has increased its dividend five times, averaging an annual increase of 4.53% [4]. Earnings Growth and Payout Ratio - For the fiscal year, ONE Gas anticipates solid earnings growth, with the Zacks Consensus Estimate for 2026 projected at $4.71 per share, indicating a year-over-year growth rate of 5.13% [5]. - The current payout ratio for ONE Gas is 60%, meaning the company distributes 60% of its trailing 12-month earnings per share as dividends [4]. Investment Considerations - ONE Gas is viewed as a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold). The company is considered a solid option for income investors, especially in the context of rising interest rates [6].

Core Viewpoint - ONE Gas, Inc. has announced the date for its 2026 Annual Meeting of Shareholders, which will be held virtually on May 21, 2026, at 10 a.m. Eastern Daylight Time [1] Company Information - ONE Gas, Inc. is a 100-percent regulated natural gas utility and trades on the New York Stock Exchange under the symbol "OGS" [1] - The company is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States [1] - Headquartered in Tulsa, Oklahoma, ONE Gas serves over 2.3 million customers across Kansas, Oklahoma, and Texas [1] Divisions - The company operates through three divisions: - Kansas Gas Service, the largest natural gas distributor in Kansas - Oklahoma Natural Gas, the largest in Oklahoma - Texas Gas Service, the third largest in Texas by customer count [1] Meeting Details - The record date for determining shareholders entitled to receive notice and vote at the meeting is set for March 23, 2026 [1] - The meeting will be accessible via audio webcast on the ONE Gas website [1]

Customer Base and Operations - ONE Gas serves approximately 2.3 million customers, making it the largest natural gas distributor in Oklahoma and Kansas, and the third largest in Texas[21] - The company employs approximately 4,000 people, including 700 at Kansas Gas Service who are subject to collective bargaining agreements[48] - Approximately 18% of the workforce is represented by collective-bargaining units, which could impact operations if disputes arise[60] - The company operates primarily in Oklahoma, Kansas, and Texas, and changes in these regions' economies and regulations could impact financial results[76] Financial Performance - Net income for the year ended December 31, 2025, was $264.2 million, or $4.37 per diluted share, representing a 19% increase from $222.9 million, or $3.91 per diluted share, in 2024[125] - Total revenues increased by 17% to $2,427.4 million in 2025 from $2,083.6 million in 2024, driven by a significant rise in natural gas sales, which grew by 18% to $2,196.3 million[126] - Operating income increased by $58.4 million for the year ended December 31, 2025, primarily due to a revenue increase of $3.0 million and a decrease in interest expense of $1.4 million[132] - Adjusted net income for 2025 was $270.969 million, compared to $224.836 million in 2024, reflecting a significant increase[140] Capital Expenditures and Investments - Capital expenditures for 2025 were $759.5 million, slightly down from $762.1 million in 2024, reflecting ongoing investments in infrastructure[126] - The company announced an infrastructure initiative with a $120 million investment to build a new pipeline in southeast Oklahoma, expected to deliver over 100 Bcf of natural gas annually by Q3 2028[107] - Capital expenditures and asset removal costs are expected to be approximately $800 million for 2026, despite a decrease of $2.6 million in 2025 compared to 2024[136] Regulatory and Rate Adjustments - Oklahoma Natural Gas operates under a Performance-Based Rate Change (PBRC) mechanism, allowing for streamlined annual rate reviews[27] - Kansas Gas Service can adjust rates through the Gas System Reliability Surcharge (GSRS) statute, which allows for recovery of qualifying infrastructure investments[28] - Texas Gas Service can adjust rates through annual filings under the GRIP statute, which allows recovery of depreciation, taxes, and returns on net increases in investment[30] - Oklahoma Natural Gas filed for a $41.1 million base rate revenue increase, which was approved and implemented in June 2025[117] - Kansas Gas Service received approval for a $7.2 million revenue increase effective August 2025[118] - Texas Gas Service filed for a $41.1 million revenue increase, with a partial settlement resulting in a $15.0 million increase based on a 9.8% return on equity[119] Safety and Employee Engagement - The company's Total Recordable Incident Rate (TRIR) improved to 1.27 in 2025 from 1.33 in 2024, indicating a focus on enhancing safety measures[49] - The Days Away, Restricted or Transferred (DART) rate increased slightly to 0.18 in 2025 from 0.15 in 2024, reflecting ongoing safety challenges[49] - The company achieved an Employee Retention Rate (ERT) of 66.3% in 2025, up from 65.6% in 2024, suggesting improvements in employee engagement and retention strategies[49] - The company is committed to a culture of inclusion and diversity, with an Inclusion and Diversity Council chaired by the CEO to promote equal opportunities[51] Environmental and Regulatory Risks - The company faces operational risks including potential pipeline ruptures and adverse weather conditions, which could materially affect financial performance[58] - Regulatory compliance costs may increase due to federal and state regulations, impacting the company's financial condition and operational costs[66] - The company is subject to various environmental regulations that could increase operating costs and adversely affect financial results, growth, and cash flows[70] - Legislative initiatives aimed at regulating greenhouse gas emissions may impose additional costs or operational requirements, impacting the company's financial performance[71] - Climate change poses risks that could increase operating costs and affect market opportunities, potentially impacting financial results[64] Financial Management and Capital Structure - Access to capital markets is crucial for the company; adverse credit conditions could limit liquidity and increase borrowing costs[77] - The company had a total debt-to-capital ratio of 47.6% as of December 31, 2025, remaining compliant with financial covenants[148] - The company increased its commercial paper capacity to $1.5 billion, with $737.4 million outstanding at a weighted-average interest rate of 3.94%[151] - The ONE Gas Credit Agreement was amended to increase capacity to $1.5 billion from $1.35 billion, with an extended term to October 30, 2030[108] Cash Flow and Investments - For the year ended December 31, 2025, operating cash flows increased to $578.8 million, up from $368.4 million in 2024, reflecting a variance of $210.4 million[164] - Cash used in investing activities was $715.3 million for the year ended December 31, 2025, compared to $707.5 million in 2024, indicating an increase of $7.8 million[165] - Cash used in financing activities increased to $91.7 million in 2025 from $378.2 million in 2024, a decrease of $286.5 million[166] Cybersecurity and Internal Controls - The company has not experienced material cybersecurity breaches, maintaining appropriate insurance coverage for its operations[94] - The company maintains effective internal control over financial reporting, as confirmed by independent auditors[212] - The company faces risks from cyber-attacks and regulatory changes that could materially affect its operations and financial performance[201] Customer Revenue and Consumption - Natural gas sales are seasonal, with higher volumes typically occurring from November to March due to heating needs[44] - The average number of residential customers increased by 15, totaling 2,118, due to new customer connections from system expansions[141] - The total volumes delivered included 216,955 MMcf for transportation in 2025, down from 221,032 MMcf in 2024[142] - The accrued unbilled natural gas sales revenue at December 31, 2025, was $216.4 million, compared to $212.0 million in 2024, indicating a growth of approximately 1.9%[185] Pension and Benefit Plans - The company contributed $6.4 million to its defined benefit pension plans for the year ended December 31, 2025, compared to $1.6 million in 2024[162] - The estimated net periodic benefit cost for defined benefit pension plans in 2026 is projected to be approximately $18.6 million, up from $5.7 million in 2025[192] - The discount rate for pension plans is set at 5.65%, with a sensitivity indicating a $2.0 million impact on costs for a quarter percentage point decrease[193] - The company anticipates contributions of $12.7 million to its defined benefit pension plans in 2026, reflecting a strategic increase in funding[191]

Financial Data and Key Metrics Changes - For the full year 2025, net income totaled $264 million, or $4.37 per diluted share, compared to $223 million and $3.91 in 2024, representing a year-over-year increase of approximately 18.4% in net income and 11.8% in EPS [6][10] - Adjusted net income for the fourth quarter was $90 million, or $1.48 per diluted share, compared with $78 million and $1.35 in the same period in 2024, indicating a 15.4% increase in adjusted net income and 9.6% in adjusted EPS [9][10] - Capital expenditures totaled $760 million for the year, reflecting the company's commitment to growth and infrastructure investment [6][15] Business Line Data and Key Metrics Changes - The company completed $760 million worth of capital investment projects during 2025, with $170 million dedicated to serving its growing customer base [15] - O&M expenses for the full year were up approximately 5% over 2024, slightly above the 4% CAGR guidance [11] Market Data and Key Metrics Changes - The company serves approximately 2.3 million customers, with a consistent addition of about 23,000 new residential customers each year [4][16] - Over 80% of the gas supply needed during Winter Storm Fern was shielded from temporary price increases, demonstrating the effectiveness of the company's supply strategies [5] Company Strategy and Development Direction - The company is focused on enhancing reliability and reducing the impact of price fluctuations on customers through increased storage capacity and diversified gas supply [4][5] - The introduction of non-GAAP adjustments to financial reports aims to provide a clearer view of performance within the Texas regulatory model [6][9] - The company plans to leverage its competitive advantages in regulatory transparency and existing assets to secure new projects [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or surpassing EPS guidance for the 12th consecutive year, with a long-term adjusted net income growth expectation of 7%-9% and adjusted EPS growth of 5%-7% [5][10] - The company anticipates a $12 million variance in adjusted net income due to the impact of Texas House Bill 4384, which will be reflected in future financial reports [9] Other Important Information - The Texas Railroad Commission approved a $14.4 million revenue increase and a 9.8% return on equity, consolidating the company's Texas jurisdictions into a single statewide division [14] - The company has maintained strong credit ratings, with S&P affirming its A- credit rating and Moody's affirming its A3 rating [12] Q&A Session Summary Question: Inquiry about non-GAAP adjustments and their impact on capital structure - Management explained that the adjustments were introduced following the finalization of Texas legislation and do not significantly impact capital market plans initially, as they are more related to earnings than cash flow [24][26] Question: Discussion on growth opportunities and competitive landscape - Management highlighted the importance of having a competitive advantage in serving new facilities and emphasized regulatory transparency as a key differentiator [27][28] Question: Clarification on potential benefits from proposed Kansas legislation - Management noted that the proposed legislation would expand the types of capital included in filings, potentially increasing customer impact from $0.80 to $1.35 per month [34][35] Question: Confirmation of guidance assumptions based on Texas rate case outcome - Management confirmed that the guidance for adjusted EPS does incorporate the latest Texas rate case outcome [45] Question: Inquiry about cash recovery related to regulatory adjustments - Management clarified that while the accrual and deferral do not directly translate to cash, once included in the GRIP filing, it will result in larger cash flow items [46]

Financial Data and Key Metrics Changes - For the full year 2025, net income totaled $264 million, or $4.37 per diluted share, compared to $223 million and $3.91 in 2024, representing a year-over-year increase of approximately 18.4% in net income and 11.8% in EPS [6][10] - Adjusted net income for the fourth quarter was $90 million, or $1.48 per diluted share, compared with $78 million and $1.35 in the same period in 2024, indicating a 15.4% increase in adjusted net income and 9.6% in adjusted EPS [9][10] - Capital expenditures totaled $760 million for the year, reflecting the company's commitment to growth and infrastructure investment [6][15] Business Line Data and Key Metrics Changes - The company completed $760 million worth of capital investment projects during 2025, with $170 million dedicated to serving its growing customer base [15] - The operational and maintenance (O&M) expense for the full year was up approximately 5% over 2024, slightly above the 4% compound annual growth rate (CAGR) guidance [11] Market Data and Key Metrics Changes - The company serves approximately 2.3 million customers, with a consistent addition of about 23,000 new residential customers each year, which helps spread costs more efficiently [16][17] - The company increased its storage capacity to over 60 billion cubic feet (BCF), enhancing reliability and reducing the impact of price fluctuations on customers [4] Company Strategy and Development Direction - The company is focused on disciplined execution of its capital plan, which supports growth while aligning with affordability, safety, and reliability commitments [15] - The introduction of non-GAAP adjustments to financial reports aims to provide a clearer view of performance within the Texas regulatory model, reflecting the returns allowed by regulators [6][10] - The company plans to leverage its competitive advantages in regulatory transparency and existing assets to secure new projects [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or surpassing the midpoint of initial EPS guidance for the 12th consecutive year, indicating strong operational performance [5] - The company anticipates long-term adjusted net income growth of 7%-9% and adjusted EPS growth of 5%-7% over the next five years [10][11] - Management highlighted the importance of legislative support in Kansas for more efficient capital recovery, which could enhance future earnings [14][35] Other Important Information - The company received a final order in the Texas rate case, approving a $14.4 million revenue increase and a 9.8% return on equity [14] - S&P and Moody's affirmed the company's credit ratings, indicating a stable outlook and strong balance sheet [12] Q&A Session Summary Question: Inquiry about non-GAAP adjustments and their impact on capital structure - Management explained that the adjustments were introduced following the finalization of Texas legislation and would not significantly impact capital structure or cash flow initially [24][26] Question: Discussion on growth opportunities and competitive landscape - Management noted that competitive advantages are assessed early in project opportunities, with regulatory transparency often serving as a tiebreaker against midstream providers [27][28] Question: Potential benefits from proposed Kansas legislation - Management indicated that the proposed legislation would expand the types of capital that qualify for recovery, potentially increasing customer impact from $0.80 to $1.35 per month [34][35] Question: Clarification on guidance assumptions related to Texas rate case - Management confirmed that the guidance for adjusted EPS includes the latest Texas rate case outcome and reflects the embedded cost of capital [45] Question: Inquiry about treasury market conditions - Management noted that current treasury market conditions are slightly favorable compared to previous guidance expectations [47]

Financial Data and Key Metrics Changes - For the full year 2025, net income totaled $264 million, or $4.37 per diluted share, compared to $223 million and $3.91 in 2024, representing a year-over-year increase of approximately 18.4% in net income and 11.8% in EPS [6][10] - Adjusted net income for the fourth quarter was $90 million, or $1.48 per diluted share, compared with $78 million and $1.35 in the same period in 2024, indicating a 15.4% increase in adjusted net income and 9.6% in adjusted EPS [9][10] - Capital expenditures totaled $760 million for the year, with O&M expenses up approximately 5% over 2024, slightly above the 4% CAGR guidance [6][11] Business Line Data and Key Metrics Changes - The company completed $760 million worth of capital investment projects during 2025, with $170 million dedicated to serving a growing customer base [16] - The company added about 23,000 new residential customers each year, which helps spread costs more efficiently and maintain affordability [17] Market Data and Key Metrics Changes - The company delivered over 3 billion cubic feet of gas to customers during Winter Storm Fern, with over 80% of the gas supply shielded from temporary price increases due to strategic investments [4][5] - The Texas Railroad Commission approved a $14.4 million revenue increase, a 9.8% return on equity, and a 59.9% equity ratio [14] Company Strategy and Development Direction - The company is focused on disciplined execution of its capital plan to support growth while ensuring affordability, safety, and reliability [16] - The introduction of non-GAAP adjustments to financial reports aims to provide a clearer view of performance within the Texas regulatory model [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or surpassing EPS guidance for the 12th consecutive year, with long-term adjusted net income growth expected at 7%-9% and adjusted EPS growth at 5%-7% [5][10] - The company anticipates a $12 million variance in adjusted net income due to the impact of Texas House Bill 4384, which will be reflected in future financial reports [9] Other Important Information - The company has broken ground on a project to serve an advanced manufacturing plant outside of El Paso, expected to be in service by the third quarter of this year [17] - The company is also supporting proposed legislation in Kansas to allow for more efficient recovery of capital investments [15] Q&A Session Summary Question: Inquiry about non-GAAP adjustments and their impact on capital structure - Management explained that the timing of the adjustments was influenced by the finalization of Texas legislation and that it does not significantly affect capital market plans initially [25][27] Question: Competitive landscape regarding growth opportunities - Management highlighted the importance of having a competitive advantage in serving facilities and noted that regulatory transparency often serves as a tiebreaker against midstream providers [28][30] Question: Potential benefits from proposed Kansas legislation - Management indicated that the proposed bill would expand the types of capital included in filings, potentially increasing customer impact from $0.80 to $1.35 per month [36][39] Question: Guidance assumptions regarding Texas rate case outcomes - Management confirmed that the guidance for adjusted EPS levels incorporates the latest Texas rate case outcome [45] Question: Cash component of regulatory adjustments - Management clarified that while the accrual and deferral do not directly translate to cash, they will lead to larger cash flow items once included in future filings [46]

Core Insights - ONE Gas, Inc. (OGS) reported Q4 2025 operating earnings per share (EPS) of $1.48, exceeding the Zacks Consensus Estimate of $1.42 by 4% and up from $1.35 in the same quarter last year [1] - OGS achieved adjusted earnings of $4.48 per share for 2025, reflecting a year-over-year increase of 13.71% compared to $3.94 in 2024 [1] Revenue Performance - OGS recorded revenues of $689.4 million in Q4 2025, surpassing the Zacks Consensus Estimate of $675 million by 2.1% and increasing by 9.31% from $630.7 million in the prior-year quarter [2] - Total revenues for 2025 reached $2.43 billion, a 16.5% increase from $2.08 billion in 2024 [2] Operational Highlights - Total natural gas volumes delivered were 103.7 billion cubic feet, marking a 1.27% year-over-year increase [3] - OGS served 2,290,000 customers, reflecting a 0.57% increase year over year [3] - Total operating expenses amounted to $257.7 million, up 6.22% from $242.7 million in the year-ago quarter, driven by higher operations and maintenance expenses, depreciation, and general taxes [3] Financial Metrics - Operating income totaled $139.7 million, a 12.41% increase from $124.3 million in the previous year [4] - Net interest expenses were $36.5 million, down 8.30% from $39.8 million in the year-ago quarter [4] Cash Flow and Debt - As of December 31, 2025, OGS had cash and cash equivalents of $10.6 million, down from $58 million as of December 31, 2024 [5] - Total long-term debt was $2.36 billion as of December 31, 2025, compared to $2.39 billion a year earlier [5] - Cash provided by operating activities during 2025 was $578.8 million, up from $368.4 million in the previous year [5] - Capital expenditure for the year totaled $707.2 million, slightly up from $703.2 million in 2024 [5] Future Guidance - OGS expects its 2026 adjusted net income to be in the range of $306-$314 million, with adjusted earnings projected between $4.83 and $4.95 per share [6] - The consensus estimate for earnings is pegged at $4.71, which is below the company's guidance range [7] - OGS plans to make capital investments of up to $800 million in 2026 to maintain system integrity and support replacement projects [7]