Financial Performance - ONE Gas reported revenue of $935.19 million for the quarter ended March 2025, reflecting a 23.3% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $1.98, up from $1.75 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $803.58 million by 16.38%, while the EPS also surpassed the consensus estimate of $1.85 by 7.03% [1] Key Metrics - Natural Gas Sales - Transportation volumes reached 65,300 MMcf, exceeding the average estimate of 64,475.83 MMcf [4] - Total Sales Volumes Delivered for Natural Gas were 79,300 MMcf, compared to the average estimate of 72,123.38 MMcf [4] - Total Volumes Delivered for Natural Gas amounted to 144,600 MMcf, surpassing the average estimate of 136,632.5 MMcf [4] - Residential Natural Gas Sales volumes were 58,900 MMcf, higher than the estimated 56,064.04 MMcf [4] - Revenue from Natural Gas Sales was $870.40 million, exceeding the average estimate of $719.29 million [4] Stock Performance - ONE Gas shares have returned +6.6% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - ONE Gas reported quarterly earnings of $1.98 per share, exceeding the Zacks Consensus Estimate of $1.85 per share, and up from $1.75 per share a year ago, representing an earnings surprise of 7.03% [1] - The company posted revenues of $935.19 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 16.38%, compared to year-ago revenues of $758.32 million [2] Group 2: Stock Performance and Outlook - ONE Gas shares have increased by approximately 13.3% since the beginning of the year, while the S&P 500 has declined by 3.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $407.66 million, and for the current fiscal year, it is $4.26 on revenues of $2.34 billion [7] Group 3: Industry Context - The Utility - Gas Distribution industry is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Northwest Natural, is expected to report quarterly earnings of $2.09 per share, reflecting a year-over-year change of +23.7%, with revenues anticipated to be $478.17 million, up 10.3% from the previous year [9][10]

Financial Performance - First quarter 2025 net income was $119.4 million, or $1.98 per diluted share, compared to $99.3 million, or $1.75 per diluted share in Q1 2024, representing a 20.5% increase in net income [2]. - Operating income for Q1 2025 was $180.5 million, up from $145.9 million in Q1 2024, reflecting a 23.6% increase [3]. - Total revenues for Q1 2025 were $935.2 million, compared to $758.3 million in Q1 2024, indicating a 23.3% year-over-year growth [20]. - Net income for the same period rose to $119.4 million, compared to $99.3 million in the prior year, reflecting a year-over-year increase of about 20.4% [33]. - Operating income for the three months ended March 31, 2025, was $180.5 million, up from $145.9 million, marking an increase of about 23.7% [33]. - Natural gas sales reached $870.4 million, an increase from $694.1 million, indicating a growth of approximately 25.4% [33]. Dividends and Guidance - The board declared a quarterly dividend of $0.67 per share, an increase from $0.66 per share in the previous year, with an annualized dividend of $2.68 [2]. - The company expects to achieve the upper half of its 2025 financial guidance, projecting net income between $254 million and $261 million, and earnings per diluted share of $4.20 to $4.32 [8]. Capital Expenditures and Investments - Capital expenditures for Q1 2025 were $177.7 million, slightly down from $179.4 million in the same period last year, focusing on system integrity and service extension [4]. - Capital investments for 2025 are anticipated to be approximately $750 million, primarily for system integrity and replacement projects [9]. - Capital expenditures and asset removal costs totaled $177.7 million for the first quarter of 2025, slightly down from $179.4 million in the same period last year [33]. Customer Growth and Weather Impact - The average number of residential customers increased to 2,125,000, compared to 2,110,000 in the prior year, reflecting a growth of approximately 0.7% [33]. - The company reported a 5% colder than normal weather impact on operating income, which was mitigated by regulatory weather normalization mechanisms [2]. Assets and Equity - Total current assets decreased to $756.2 million as of March 31, 2025, down from $929.9 million at the end of 2024, a decline of about 18.6% [24]. - Total assets decreased to $8,327.2 million as of March 31, 2025, compared to $8,425.6 million at the end of 2024, a reduction of approximately 1.2% [24]. - Total equity increased to $3,185.0 million as of March 31, 2025, up from $3,104.5 million at the end of 2024, representing a growth of about 2.6% [24]. Regulatory Filings - Kansas Gas Service has requested a $7.2 million increase related to its Gas System Reliability Surcharge, with a decision expected by August 2025 [5]. - Oklahoma Natural Gas filed for a $41.5 million increase in its Performance-Based Rate Change application, reflecting net customer growth in Oklahoma and Texas [6]. Cash Flow - Cash provided by operating activities for the three months ended March 31, 2025, was $277.5 million, significantly higher than $108.3 million in the same period last year [26].

Core Insights - ONE Gas, Inc. reported strong financial results for the first quarter of 2025, with expectations to achieve the upper half of its previously announced financial guidance for the year [1][10] - The company declared a quarterly dividend of $0.67 per share, reflecting a commitment to returning value to shareholders [9] Financial Performance - Operating income for Q1 2025 was $180.5 million, up from $145.9 million in Q1 2024, driven by effective regulatory strategies and disciplined expense management [3][30] - Net income for the first quarter was $119.4 million, or $1.98 per diluted share, compared to $99.3 million, or $1.75 per diluted share, in the same period last year [9][20] - Total revenues increased to $935.2 million in Q1 2025 from $758.3 million in Q1 2024, with natural gas sales contributing significantly to this growth [30] Capital Expenditures and Investments - Capital expenditures and asset removal costs for Q1 2025 were $177.7 million, slightly down from $179.4 million in the same period last year, focusing on system integrity and service extension [4][30] - The company anticipates total capital investments of approximately $750 million for 2025, primarily for system integrity and replacement projects [10] Regulatory Activities - Kansas Gas Service submitted a request for a $7.2 million increase related to its Gas System Reliability Surcharge, with a decision expected by August 2025 [5] - Oklahoma Natural Gas filed for a $41.5 million base rate revenue increase, with a hearing scheduled for June 12, 2025 [6] Customer Metrics - The average number of customers increased to 2.305 million in Q1 2025, up from 2.290 million in Q1 2024, indicating growth in customer base across service areas [30][31] - The company experienced colder weather conditions, with actual degree days being 5% colder than normal, which positively impacted natural gas demand [9][31]

Group 1 - Spire (SR) and ONE Gas (OGS) are being considered as potential undervalued stocks in the Utility - Gas Distribution sector [1] - The Zacks Rank system indicates that SR has a rank of 2 (Buy) while OGS has a rank of 3 (Hold), suggesting a more favorable outlook for SR [3] - Value investors analyze various metrics to determine if a company is undervalued, including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] Group 2 - SR has a forward P/E ratio of 17.01, while OGS has a forward P/E of 18.45, indicating that SR may be more attractively priced [5] - The PEG ratio for SR is 2.60, compared to OGS's PEG ratio of 3.32, suggesting SR has a better earnings growth outlook relative to its price [5] - SR's P/B ratio is 1.37, while OGS's P/B ratio is 1.43, further supporting SR's stronger valuation metrics [6] Group 3 - SR's improving earnings outlook is a significant factor in its favorable Zacks Rank, making it a potentially superior value option compared to OGS [7]

Company Overview - ONE Gas (OGS) is expected to report a year-over-year increase in earnings, with a projected EPS of $1.85, reflecting a +5.7% change, and revenues anticipated at $803.58 million, up 6% from the previous year [3][12] - The stock's performance may be influenced by how actual results compare to these estimates, with a potential stock price increase if results exceed expectations [1][2] Earnings Estimates and Revisions - The consensus EPS estimate has been revised 2.23% lower over the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for ONE Gas is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.11%, suggesting a likelihood of beating the consensus EPS estimate [10][11] Earnings Surprise History - In the last reported quarter, ONE Gas had an expected EPS of $1.33 but delivered $1.34, resulting in a surprise of +0.75% [12] - Over the last four quarters, ONE Gas has only beaten consensus EPS estimates once [13] Industry Context - In the Zacks Utility - Gas Distribution industry, Spire (SR) is expected to post earnings of $3.70 per share, indicating a +7.3% year-over-year change, with revenues projected at $1.09 billion, down 3% from the previous year [17] - The consensus EPS estimate for Spire has been revised 1.5% higher, but with an Earnings ESP of 0.00%, it is difficult to predict a beat against the consensus EPS estimate [18]

Company Participation - ONE Gas, Inc. will participate in the American Gas Association Financial Forum from May 18-20, 2025, in Marco Island, Florida [1] - Key executives including Robert S. McAnnally, Curtis Dinan, and Christopher Sighinolfi will hold meetings with the investment community [1] Financial Information - Materials from the conference will be available on the ONE Gas website after market close on May 16, 2025 [2] - ONE Gas is a 100-percent regulated natural gas utility and is listed on the New York Stock Exchange under the symbol "OGS" [2] Company Overview - ONE Gas is headquartered in Tulsa, Oklahoma, serving over 2.3 million customers across Kansas, Oklahoma, and Texas [3] - The company operates three divisions: Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service, with Kansas Gas Service being the largest distributor in Kansas [3]

Company Overview - ONE Gas, Inc. is a 100-percent regulated natural gas utility and trades on the New York Stock Exchange under the symbol "OGS" [3] - The company is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States [3] - Headquartered in Tulsa, Oklahoma, ONE Gas provides reliable and affordable energy to over 2.3 million customers in Kansas, Oklahoma, and Texas [4] Financial Results Announcement - ONE Gas will release its first quarter 2025 financial results after the market closes on May 5, 2025 [1] - The executive management team will participate in a conference call on May 6, 2025, at 11 a.m. Eastern Daylight Time [1][2] - The conference call will be accessible via phone and webcast, with a replay available for 30 days on the ONE Gas website [2]

Company Overview - ONE Gas, Inc. is a 100-percent regulated natural gas utility and trades on the New York Stock Exchange under the symbol "OGS" [2] - The company is included in the S&P MidCap 400 Index and is one of the largest natural gas utilities in the United States [2] - Headquartered in Tulsa, Oklahoma, ONE Gas provides reliable and affordable energy to over 2.3 million customers in Kansas, Oklahoma, and Texas [3] Divisions and Market Position - ONE Gas operates through three 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 [3] Annual Meeting Details - The 2025 Annual Meeting of Shareholders will be held virtually on May 22, 2025, at 10 a.m. Eastern Daylight Time [1] - The record date for determining shareholders entitled to vote is March 24, 2025 [1] - Shareholders can register to attend the meeting virtually and access the audio webcast through the company's website [2]

Financial Performance - Total revenues for 2024 were $2,083,558, a decrease of 12.1% from $2,371,990 in 2023[229]. - Net income for 2024 was $222,850, down 3.3% from $231,232 in 2023[229]. - Operating income increased to $399,044 in 2024, up 5.4% from $377,590 in 2023[229]. - Earnings per share (EPS) for 2024 were $3.92, a decrease from $4.16 in 2023[229]. - Total assets increased to $8,425,571 in 2024, up from $7,770,994 in 2023, reflecting a growth of 8.4%[233]. - Cash and cash equivalents rose to $57,995 in 2024, compared to $18,835 in 2023, indicating a significant increase[233]. - Total equity grew to $3,104,548 in 2024, an increase of 12.3% from $2,765,877 in 2023[235]. - Cash provided by operating activities decreased significantly to $368.41 million in 2024 from $939.53 million in 2023, reflecting a decline of 60.7%[237]. - Capital expenditures increased to $703.17 million in 2024, up from $666.63 million in 2023, representing a rise of 5.5%[237]. - Common stock dividends per share increased to $2.64 in 2024 from $2.60 in 2023, reflecting a 1.5% increase[238]. Customer Base and Market Position - The company has approximately 2.3 million customers across three states, indicating a broad customer base and reduced concentration of credit risk[213]. - The company served approximately 2.3 million customers across Oklahoma, Kansas, and Texas, maintaining its customer base[242]. - The company had no single external customer contributing 10% or more of gross revenues in 2024, 2023, and 2022, indicating a diversified revenue base[243]. Debt and Financing - ONE Gas maintains a $1.35 billion revolving credit agreement, which supports its financing needs[19]. - The ONE Gas Credit Agreement was increased to $1.35 billion in October 2024, up from $1.275 billion in June 2024[308][309]. - At December 31, 2024, the total debt-to-capital ratio was 51.8%, compliant with the ONE Gas Credit Agreement covenants[311]. - Total long-term debt, net, decreased to $2.414 billion in 2024 from $2.961 billion in 2023, with significant reductions in senior notes due February 2024 and March 2024[315]. - The company issued $300 million of 5.10% senior notes due April 2029 in December 2023, and repaid $300 million of 3.61% senior notes upon maturity[318]. - In August 2024, the company reopened its 5.10% senior notes due 2029, issuing an additional $250 million, bringing the total outstanding to $550 million[319]. Risk Management - ONE Gas utilizes purchased-gas cost adjustment mechanisms to mitigate commodity price risk associated with natural gas fluctuations[211]. - Interest-rate risk is managed through fixed-rate and floating-rate debt, as well as interest-rate swaps to stabilize borrowing costs[212]. - The company emphasizes the importance of effective risk-management policies and compliance with internal controls to mitigate operational risks[210]. - The company is subject to various market risks, including changes in inflation, interest rates, and regulatory requirements[210]. Regulatory and Compliance - Regulatory assets included $379 million of deferred costs and $490 million of regulatory liabilities as of December 31, 2024[225]. - The company recorded no write-offs of regulatory assets resulting from failure to meet capitalization criteria during 2024, 2023, and 2022, indicating effective regulatory asset management[277]. - The company reported a net regulatory liability of $(110,872,000) as of December 31, 2024, compared to $(204,165,000) in 2023[298][299]. - The company adopted new accounting standards for income tax disclosures and segment reporting, effective for annual periods beginning after December 15, 2024, and December 15, 2023, respectively[293][294]. Pension and Employee Benefits - The discount rate for pension plans increased to 5.70% in 2024 from 5.30% in 2023[348]. - The expected long-term return on plan assets for pension plans was 6.70% in 2024, slightly down from 6.75% in 2023[349]. - The pension benefit obligation decreased from $803.6 million in 2023 to $731.1 million in 2024, reflecting a reduction of approximately 9%[356]. - The net periodic benefit cost for pension benefits was a credit of $5.5 million in 2024, compared to a credit of $7.5 million in 2023[360]. - The company expects to contribute $9.8 million to its defined benefit pension plans in 2025, with no contributions planned for other postemployment benefit plans[358]. Environmental and Remediation Costs - The company is subject to various environmental regulations that may lead to increased compliance costs and potential future expenditures[396]. - Kansas Gas Service requested to increase the cap on the AAO from $15.0 million to $32 million on January 3, 2025, to cover additional remediation costs[392]. - The reserve for remediation of MGP sites was $14.3 million as of December 31, 2024, unchanged from 2023[394]. - The company received $1.7 million in insurance proceeds for remediation costs during 2024[392].