Core Viewpoint - ONE Gas reported quarterly earnings of $0.53 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.48 per share a year ago [1] - The company posted revenues of $423.74 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 4.86% and up from $354.14 million year-over-year [2] Earnings Performance - The earnings surprise for the previous quarter was +7.03%, with actual earnings of $1.98 per share compared to an expected $1.85 [1] - Over the last four quarters, ONE Gas has surpassed consensus EPS estimates two times [1] Revenue Performance - The company has also topped consensus revenue estimates two times over the last four quarters [2] Stock Performance - ONE Gas shares have increased by approximately 5.9% since the beginning of the year, while the S&P 500 has gained 7.6% [3] Future Outlook - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.54 on revenues of $383.09 million, and for the current fiscal year, it is $4.29 on revenues of $2.43 billion [7] Industry Context - The Utility - Gas Distribution industry is currently in the top 30% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) ONE Gas reported strong Q2 2025 results with increased net income and diluted EPS, raising full-year guidance and declaring a $0.67 quarterly dividend Q2 & YTD 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $32.0 million | $27.2 million | $151.5 million | $126.6 million | | **Diluted EPS** | $0.53 | $0.48 | $2.51 | $2.23 | - The company increased its 2025 diluted earnings per share guidance from a range of **$4.20 - $4.32** to a new range of **$4.32 - $4.42**[2](index=2&type=chunk) - The board of directors declared a quarterly dividend of **$0.67 per share**, which is **$2.68** on an annualized basis[2](index=2&type=chunk) - In May 2025, the company executed a forward sale agreement for **2.5 million shares** of common stock at a net price of **$78.47 per share**, with settlement by December 31, 2026[2](index=2&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Operating income increased in Q2 and YTD due to new rates, partially offset by higher operating expenses, while capital expenditures remained stable [Second Quarter 2025 Performance](index=2&type=section&id=Second%20Quarter%202025%20Performance) Q2 2025 operating income increased to $71.9 million, driven by new rates and sales volumes, despite higher expenses, with capital expenditures at $190.1 million Q2 2025 Operating Income Drivers (vs Q2 2024) | Driver | Impact (in millions) | | :--- | :--- | | **Increases** | | | New Rates | +$21.1 | | Higher Sales Volumes (net) | +$2.1 | | Residential Customer Growth | +$1.5 | | **Offsets** | | | Depreciation & Amortization | -$6.8 | | Employee-related Costs | -$5.7 | | Ad Valorem Taxes | -$5.0 | | Bad Debt Expense | -$1.6 | | Customer Refund | -$2.9 | - Capital expenditures and asset removal costs were **$190.1 million** in Q2 2025, slightly down from **$194.6 million** in Q2 2024[5](index=5&type=chunk) - Weather was **19% warmer** than normal but **45% colder** than Q2 2024, with the impact on operating income largely mitigated by regulatory weather normalization mechanisms[3](index=3&type=chunk) [Year-to-Date 2025 Performance](index=2&type=section&id=Year-to-Date%202025%20Performance) YTD 2025 operating income rose to $252.4 million, primarily from new rates, with capital expenditures totaling $367.8 million YTD 2025 Operating Income Drivers (vs YTD 2024) | Driver | Impact (in millions) | | :--- | :--- | | **Increases** | | | New Rates | +$73.0 | | Residential Customer Growth | +$3.9 | | **Offsets** | | | Depreciation & Amortization | -$11.9 | | Ad Valorem Taxes | -$9.7 | | Employee-related Costs | -$9.0 | | Bad Debt Expense | -$2.3 | | Insurance Expense | -$1.7 | | Customer Refund | -$2.9 | - Capital expenditures and asset removal costs for the six-month period were **$367.8 million**, compared to **$374.0 million** in the same period last year[10](index=10&type=chunk) - Weather for the six-month period was **3% colder** than normal and **18% colder** than the same period in 2024, with the financial impact largely tempered by regulatory mechanisms[8](index=8&type=chunk) [Regulatory Activities Update](index=3&type=section&id=Regulatory%20Activities%20Update) The company is actively engaged in regulatory proceedings, including rate case filings in Texas, approved increases in Kansas and Texas, and a settled increase in Oklahoma - **Texas:** Texas Gas Service filed a rate case in June 2025 for a **$41.1 million** revenue increase, with new rates expected in Q1 2026. Separately, Gas Reliability Infrastructure Program (GRIP) filings resulted in approved rate increases effective June 2025[11](index=11&type=chunk)[15](index=15&type=chunk) - **Kansas:** Kansas Gas Service received approval for a **$7.2 million** increase related to its Gas System Reliability Surcharge, effective August 2025[12](index=12&type=chunk) - **Oklahoma:** Oklahoma Natural Gas reached a settlement for its Performance-Based Rate Change application, resulting in a **$41.1 million** base rate revenue increase. Interim rates were implemented in June 2025, with final approval in July 2025[14](index=14&type=chunk) [2025 Financial Guidance](index=4&type=section&id=2025%20Financial%20Guidance) ONE Gas increased its 2025 financial guidance for net income and diluted EPS, while capital expenditure guidance remains at $750 million Updated 2025 Financial Guidance | Metric | Previous Guidance | Increased Guidance | | :--- | :--- | :--- | | **Net Income** | $254M - $261M | $261M - $267M | | **Diluted EPS** | $4.20 - $4.32 | $4.32 - $4.42 | | **EPS Midpoint** | $4.26 | $4.37 | - Capital expenditures, including asset removal costs, are still expected to be approximately **$750 million** in 2025[17](index=17&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) An earnings conference call and webcast for Q2 2025 results will be held on August 6, 2025, with replay options available - **Event:** Earnings Conference Call and Webcast[18](index=18&type=chunk) - **Date and Time:** Wednesday, August 6, 2025, at 11 a.m. EDT (10 a.m. CDT)[18](index=18&type=chunk) - **Access:** Dial 833-470-1428 (passcode 734834) or log on to the company's investor relations website[18](index=18&type=chunk) - A replay will be available on the website for 30 days and by phone for seven days[19](index=19&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This report includes forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially - The forward-looking statements are based on current expectations and are subject to known and unknown risks, uncertainties, and other factors[22](index=22&type=chunk)[24](index=24&type=chunk) - **Key risk factors** include, but are not limited to: * Ability to recover costs through regulated rates * Cyber-attacks and breaches of technology systems * Changes in regulation in Oklahoma, Kansas, and Texas * Competition from alternative energy sources * Adverse weather conditions and climate change * Availability of and access to capital markets[24](index=24&type=chunk)[27](index=27&type=chunk) [Appendix: Financial Statements and Supplementary Data](index=7&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Supplementary%20Data) The appendix provides detailed unaudited financial statements, including income, balance, and cash flow statements, along with KGSS-I securitization and operational metrics [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Total revenues increased to $423.7 million for Q2 and $1.36 billion YTD, with net income reaching $32.0 million for the quarter and $151.5 million YTD Income Statement Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $423,741 | $354,137 | $1,358,931 | $1,112,457 | | **Operating Income** | $71,855 | $69,280 | $252,354 | $215,140 | | **Net Income** | $32,033 | $27,243 | $151,452 | $126,560 | | **Diluted EPS** | $0.53 | $0.48 | $2.51 | $2.23 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $8.36 billion, total equity increased to $3.18 billion, and long-term debt remained stable Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $8,359,141 | $8,425,571 | | Net Property, Plant & Equipment | $6,872,091 | $6,645,873 | | **Total Liabilities** | $5,174,806 | $5,321,023 | | **Total Equity** | $3,184,335 | $3,104,548 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $448.8 million, while investing activities used $348.5 million and financing activities used $136.1 million Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Cash from Operating Activities** | $448,809 | $250,926 | | **Cash used in Investing Activities** | ($348,511) | ($341,776) | | **Cash from (used in) Financing Activities** | ($136,114) | $83,929 | | **Change in Cash** | ($35,816) | ($6,921) | [KGSS-I Securitization](index=11&type=section&id=KGSS-I%20Securitization) KGSS-I contributed $13.2 million in Q2 and $24.8 million YTD revenue, with a negligible net income impact due to offsetting expenses Income Statement Impact of KGSS-I (in thousands) | Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | **Operating Revenues** | $13,205 | $24,842 | | **Total Expenses** | ($13,282) | ($24,770) | | **Net Income** | $29 | $72 | [Information at a Glance](index=13&type=section&id=Information%20at%20a%20Glance) Key operational data shows total delivered gas volumes increased to 212.2 Bcf, average customers grew to 2.303 million, and weather was colder than normal Key Operating Metrics - Six Months Ended June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Total Volumes Delivered (Bcf)** | 212.2 | 202.1 | | **Average Number of Customers (thousands)** | 2,303 | 2,287 | - Weather for the six-month period was **3% colder** than normal, compared to **13% warmer** than normal in the same period of 2024[43](index=43&type=chunk)

Core Insights - ONE Gas, Inc. reported strong operational performance in the second quarter of 2025, leading to increased financial guidance for the year [2][15] - The company declared a quarterly dividend of $0.67 per share, reflecting a commitment to returning value to shareholders [6][15] Financial Performance - For Q2 2025, ONE Gas reported operating income of $71.9 million, up from $69.3 million in Q2 2024, driven by regulatory mechanisms that mitigated the impact of weather [3][38] - Net income for Q2 2025 was $32.0 million, or $0.53 per diluted share, compared to $27.2 million, or $0.48 per diluted share, in Q2 2024 [6][38] - Year-to-date net income for 2025 reached $151.5 million, or $2.51 per diluted share, compared to $126.6 million, or $2.23 per diluted share, in the same period last year [6][38] Capital Expenditures - Capital expenditures and asset removal costs for Q2 2025 were $190.1 million, slightly lower than $194.6 million in the same period last year [5][38] - Year-to-date capital expenditures totaled $367.8 million, compared to $374.0 million in the first half of 2024 [9][38] Regulatory Activities - Texas Gas Service filed a rate case in June 2025, requesting a $41.1 million revenue increase, with new rates expected to take effect in Q1 2026 [10] - Oklahoma Natural Gas reached a settlement for a $41.1 million base rate revenue increase, effective from June 2025 [12][14] Financial Guidance - The company raised its 2025 financial guidance, expecting net income in the range of $261 million to $267 million, up from the previous range of $254 million to $261 million [15] - Earnings per diluted share guidance was increased to approximately $4.32 to $4.42, from a prior range of $4.20 to $4.32 [15] Customer Metrics - ONE Gas serves over 2.3 million customers across Kansas, Oklahoma, and Texas, with a slight increase in customer numbers compared to the previous year [19][38] - The average number of residential customers was 2,124 thousand in Q2 2025, compared to 2,106 thousand in Q2 2024 [38]

Core Viewpoint - The Zacks Utilities sector is expected to see a 0.7% increase in earnings for Q2 2025, driven by higher revenues of 7.5%, supported by new rates, cost-saving initiatives, and customer growth [1] Group 1: Earnings Expectations - MDU Resources Group is anticipated to benefit from customer growth in electric and natural gas sectors, with an Earnings ESP of +20% and a Zacks Rank 2, despite a projected earnings decrease of 59.4% year-over-year [7][8] - ONE Gas is expected to report earnings of $1.75 per share, reflecting a 37.8% increase from the previous year, supported by new rates and infrastructure investments, with an Earnings ESP of +3.22% and a Zacks Rank 2 [9][10] - Sempra Energy's earnings are projected at 83 cents per share, a decrease of 6.7% from the prior year, benefiting from renewable energy investments and data center demand, with an Earnings ESP of +0.60% and a Zacks Rank 2 [11] - Spire is expected to show an improvement in fiscal third-quarter earnings, with a projected loss of 9 cents per share, indicating a 35.7% improvement year-over-year, supported by advanced meter installations and customer growth, with an Earnings ESP of +14.81% and a Zacks Rank 3 [12][13] Group 2: Factors Influencing Performance - Utility providers are benefiting from higher electricity rates, acquisitions, cost reductions, and energy-efficiency programs, which enhance their overall performance [3] - The installation of smart meters is improving operational efficiency and customer engagement, leading to reduced costs and increased revenue [4] - The growing demand from data centers, particularly those supporting artificial intelligence, is significantly increasing electricity consumption, positively impacting utility revenues [5] - Economic improvements in service territories are creating fresh demand for utility services, further boosting revenues [4][5][6]

Group 1 - ONE Gas (OGS) has a strong history of beating earnings estimates, particularly in the last two quarters, indicating potential for future earnings beats [1][2] - The average surprise for ONE Gas over the past two quarters is 3.89%, with a recent quarter showing a surprise of 7.03% and the previous quarter at 0.75% [2] - The company's Earnings ESP (Expected Surprise Prediction) is currently +4.76%, suggesting analysts are optimistic about its near-term earnings potential [8] Group 2 - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) indicates a high likelihood of another earnings beat for ONE Gas [8] - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The next earnings report for ONE Gas is anticipated to be released on August 5, 2025 [8]

TULSA, Okla., July 9, 2025 /PRNewswire/ -- ONE Gas released its annual Sustainability Report this week, highlighting priorities related to safety, environmental sustainability and a dynamic workforce.The report offers insight into key ONE Gas benchmarks in the natural gas industry, including reducing emissions, improving systemwide safety, boosting employee engagement and contributing to communities. ONE Gas highlights priorities in safety, environmental sustainability and a dynamic workforce in new Sus ...

Core Viewpoint - ONE Gas, Inc. is set to release its second quarter 2025 financial results on August 5, 2025, followed by a conference call on August 6, 2025, to discuss the results and provide insights to investors [1][2]. Company Overview - ONE Gas, Inc. is a fully regulated natural gas utility, trading on the New York Stock Exchange under the symbol "OGS" [3]. - The company is part of the S&P MidCap 400 Index and ranks among the largest natural gas utilities in the United States [3]. - Headquartered in Tulsa, Oklahoma, ONE Gas serves over 2.3 million customers across Kansas, Oklahoma, and Texas [4]. Divisions and Market Position - ONE Gas operates through three main divisions: Kansas Gas Service, the largest natural gas distributor in Kansas; Oklahoma Natural Gas, the largest in Oklahoma; and Texas Gas Service, the third largest in Texas by customer count [4].

Industry Overview - The U.S. natural gas distribution pipeline network is crucial for transporting natural gas to end users, consisting of nearly 3 million mainline and other pipes, driven by rising natural gas usage [1] - Natural gas is increasingly favored for power generation due to its cleaner burning characteristics, with domestic production rising due to increased LNG exports and public awareness of lower emissions [2] Financial Environment - The natural gas pipeline industry requires a consistent flow of funds for maintenance and repair of aging infrastructure, with the Federal Reserve lowering the federal fund rate by one percentage point since September 2024, expected to reduce capital servicing costs for utilities [3] Utility Performance - Utility service providers generally experience steady revenue and profitability growth, allowing for regular dividend payments that enhance shareholder value [4] - The U.S. Energy Information Administration forecasts natural gas consumption for electricity generation to average 38.4 billion cubic feet per day in June, a 26% increase from May, with an overall expected increase of 1% in 2025 [5] Company Analysis - A comparative analysis of Atmos Energy (ATO) and ONE Gas (OGS) shows both companies currently hold a Zacks Rank 2 (Buy) [6] - The Zacks Consensus Estimate for ATO's fiscal 2025 EPS has increased by 0.6% to $7.24, while OGS's EPS estimate has risen by 0.7% to $4.29 [7] Financial Metrics - ATO's return on equity (ROE) is 9.05%, while OGS's ROE is 8.15%, both slightly below the industry average of 9.24% [8] - The debt-to-capital ratios for ATO and OGS are 39.3% and 40.43%, respectively, compared to the industry average of 50.49% [9] - ATO has a current ratio of 1.33, indicating strong liquidity, while OGS's current ratio is 0.59, below the industry average of 0.63 [11] Stock Performance - Over the past six months, ATO's stock has risen by 11.7%, outperforming the industry's 2% growth and OGS's 5.2% increase [10][12] - ATO's dividend yield is 2.23%, while OGS's is 3.64%, both exceeding the S&P 500 Composite's average of 1.25% [14] Conclusion - Both Atmos Energy and ONE Gas are positioned as strong investment opportunities, with ATO being favored due to better debt management, liquidity, and stock performance [15]

Financial Performance and Outlook - ONE Gas expects net income for 2025 to be in the range of $254 million to $261 million, aiming for the upper half of this range[23] - The company anticipates EPS (Earnings Per Share) for 2025 to be between $420 and $432, also expecting to achieve the upper half of the range[10, 23] - ONE Gas projects EPS growth of 4-6% for the period of 2025-2029[10] - Capital investments for 2025 are estimated at $750 million, with approximately $180 million allocated to customer growth[10, 23] - The average rate base for 2025 is projected to be $58 billion[23, 28] - Long-term net income growth is expected to be 7-9% for the 2024-2029 period[28] Capital Investments and Financing - Capital investments of approximately $4 billion are planned, including $28 billion for system integrity and replacement projects and $1 billion for growth capital[28] - The company anticipates a short- and long-term financing need of $270-$300 million for 2025[24] - ONE Gas has already executed forward sale agreements covering approximately 29 million shares at an average price of $7822 per share, totaling approximately $227 million[25] Regulatory and Operational Highlights - ONE Gas serves approximately 23 million customers across Kansas, Oklahoma, and Texas[5] - The company has a 71% market share in Kansas, 89% in Oklahoma, and 13% in Texas[8] - ONE Gas aims to achieve a 55% reduction in Scope 1 emissions by 2035, measured from a 2005 baseline[82]

Key Takeaways OGS invested $703.2M in 2024 and plans $750M in 2025 to expand and upgrade its natural gas infrastructure. Revenue growth is supported by new rates in key states and the proximity of supply assets to gas reserves. Residential customers make up 92% of OGS' clientele, guaranteeing profit visibility.ONE Gas, Inc. (OGS) continues to benefit from its strategic capital expenditures for pipeline integrity and extension of services to new areas. The company is expected to benefit from 100% regulated ...