Core Insights - ONE Gas, Inc. (OGS) reported third-quarter 2025 operating earnings per share (EPS) of 44 cents, matching the Zacks Consensus Estimate and representing a 29.4% increase from the previous year's earnings of 34 cents [1][9] OGS' Revenues - OGS recorded revenues of $379.1 million, which fell short of the Zacks Consensus Estimate of $383 million by 0.9% but showed an 11.4% increase from $340.4 million in the prior-year quarter [2][9] Highlights of OGS' Earnings Release - Total natural gas volumes delivered were 58.4 billion cubic feet, a decrease of 2.3% year-over-year - OGS served 2,284,000 customers, reflecting a 0.5% year-over-year increase - Total operating expenses rose to $237.1 million, up 7.1% year-over-year, driven by increases in operations and maintenance, depreciation and amortization, and general taxes - Operating income increased by 9.9% year-over-year to $65.4 million [3] Financial Performance - OGS incurred net interest expenses of $35.4 million, down 9.5% year-over-year [4] - As of September 30, 2025, OGS had cash and cash equivalents of $9.05 million, a decrease from $58 million as of December 31, 2024 - Total long-term debt (excluding current maturities) was $2.36 billion, down from $2.39 billion as of December 31, 2024 - Cash provided by operating activities in the first nine months of 2025 was $535.8 million, compared to $305.8 million in the same period last year [5] Capital Expenditures - During the first nine months of 2025, capital expenditures were $539.4 million, an increase from $523.6 million in the year-ago period [6] OGS' 2025 Guidance - OGS narrowed its 2025 financial guidance, now expecting net income in the range of $262-$266 million, compared to the previous range of $261-$267 million - Earnings per diluted share are now expected to be in the range of $4.34-$4.40, revised from $4.32-$4.42 - The Zacks Consensus Estimate for earnings is pegged at $4.36, which is below the midpoint of the company's revised guidance [7][9] OGS' Zacks Rank - Currently, ONE Gas carries a Zacks Rank 2 (Buy) [8]

Financial Performance - Third quarter 2025 net income was $26.5 million, or $0.44 per diluted share, compared to $19.3 million, or $0.34 per diluted share, in Q3 2024[2] - Year-to-date 2025 net income reached $177.9 million, or $2.94 per diluted share, up from $145.8 million, or $2.56 per diluted share, in the same period last year[2] - Operating income for Q3 2025 was $65.4 million, an increase from $59.5 million in Q3 2024[3] - Total revenues for the three months ended September 30, 2025, were $379.1 million, an increase of 11.3% from $340.4 million in the same period last year[27] - Net income for the nine months ended September 30, 2025, was $177.9 million, up 22.0% from $145.8 million in the prior year[27] - Operating income for the three months ended September 30, 2025, was $65.4 million, compared to $59.4 million for the same period in 2024, reflecting a 10.3% increase[27] - Earnings per share for the nine months ended September 30, 2025, were $2.96, up from $2.57 in the same period last year, representing a 15.1% increase[27] - Operating income for the nine months ended September 30, 2025, was $317.7 million, compared to $274.6 million for the same period in 2024, reflecting a 15.7% increase[42] - Net income for Q3 2025 was $26.5 million, up 37.3% from $19.3 million in Q3 2024[42] Capital Expenditures - Capital expenditures for Q3 2025 were $207.6 million, compared to $197.7 million in the same period last year[4] - Year-to-date capital expenditures were $575.4 million, slightly up from $571.7 million in the same period last year[8] - The company expects total capital expenditures, including asset removal costs, to be approximately $750 million in 2025[15] - Capital expenditures for the nine months ended September 30, 2025, were $539.4 million, compared to $523.6 million in the same period last year, reflecting a 3.0% increase[33] Revenue and Sales - The company reported an increase of $92.2 million from new rates year-to-date 2025[6] - Natural gas sales for Q3 2025 were $327.3 million, a 12.9% increase from $289.8 million in Q3 2024[42] - Total revenues for Q3 2025 reached $379.1 million, a 11.5% increase from $340.4 million in Q3 2024[42] Guidance and Dividends - The company narrowed its 2025 diluted earnings per share guidance to a range of $4.34 to $4.40, from a previous range of $4.32 to $4.42[2] - The company anticipates net income for 2025 to be in the range of $262 million to $266 million, compared to the previous range of $261 million to $267 million[14] - The board declared a quarterly dividend of $0.67 per share, payable on December 1, 2025[2] - The company declared a fourth quarter dividend of $0.67 per share, up from $0.66 per share in the previous year[27] - The company narrowed its 2025 financial guidance, indicating a focus on maintaining operational efficiency and cost management[34] - The company narrowed its 2025 financial guidance, indicating a more focused outlook for the remainder of the year[40] Assets and Cash Flow - Total assets as of September 30, 2025, were $8.5 billion, compared to $8.4 billion as of December 31, 2024, indicating a growth of 1.0%[31] - Cash provided by operating activities for the nine months ended September 30, 2025, was $535.8 million, an increase of 75.0% from $305.8 million in the prior year[33] - Total assets decreased to $257.6 million as of September 30, 2025, down from $291.2 million a year earlier, representing an 11.5% decline[39] Customer Metrics and Operational Efficiency - The average number of residential customers increased to 2,109,000 in Q3 2025, compared to 2,096,000 in Q3 2024[42] - Operating expenses for Q3 2025 were $110,000, marginally lower than $111,000 in Q3 2024[40] - The company reported a significant increase in heating degree days, with actual degree days at 14 compared to 8 in Q3 2024, indicating colder weather conditions[42]

Core Insights - ONE Gas, Inc. reported a strong third quarter performance with operating income of $65.4 million, up from $59.5 million in the same quarter of 2024, reflecting disciplined execution of strategy and operational efficiency [2][11] - The company narrowed its 2025 financial guidance, expecting net income in the range of $262 million to $266 million and diluted earnings per share between $4.34 and $4.40 [10][13] - A quarterly dividend of $0.67 per share was declared, payable on December 1, 2025, indicating a commitment to returning value to shareholders [11] Financial Performance - For the third quarter of 2025, total revenues reached $379.1 million, compared to $340.4 million in the third quarter of 2024, driven by increased natural gas sales and new rates [11][23] - Year-to-date operating income for 2025 was $317.7 million, up from $274.6 million in 2024, highlighting consistent growth [4][11] - Net income for the third quarter was $26.5 million, or $0.44 per diluted share, compared to $19.3 million, or $0.34 per diluted share, in the prior year [11][23] Capital Expenditures - Capital expenditures and asset removal costs for the third quarter of 2025 totaled $207.6 million, slightly higher than $197.7 million in the same period last year, primarily for system integrity and service extension [3][11] - Year-to-date capital expenditures were $575.4 million, compared to $571.7 million in the same period of 2024, indicating ongoing investment in infrastructure [5][11] 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 the first quarter of 2026 [6] - Kansas Gas Service and Oklahoma Natural Gas also filed for rate increases in 2025, reflecting ongoing regulatory adjustments to support operational costs [8][9] Customer Growth - The average number of customers served by ONE Gas increased to 2.3 million, with notable growth in residential sales in Oklahoma and Texas contributing to revenue increases [11][18] - Natural gas sales volumes for the third quarter were 12.3 Bcf, up from 11.7 Bcf in the same quarter of 2024, indicating a positive trend in demand [11][31]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for ONE Gas, driven by higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - ONE Gas is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year increase of 29.4% [3]. - Revenue projections stand at $382.7 million, marking a 12.4% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.42% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - A positive Earnings ESP of +0.38% suggests analysts are optimistic about ONE Gas's earnings prospects [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - ONE Gas currently holds a Zacks Rank of 2, enhancing the likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, ONE Gas met the expected earnings of $0.53 per share, resulting in no surprise [13]. - Over the past four quarters, the company has exceeded consensus EPS estimates twice [14]. Conclusion - ONE Gas is positioned as a compelling candidate for an earnings beat, but investors should consider additional factors before making investment decisions [17].

Group 1 - As of October 9, 2025, two utility stocks are signaling potential warnings for momentum-focused investors [1] - The Relative Strength Index (RSI) is a key momentum indicator, with values above 70 indicating overbought conditions [2] - ONE Gas Inc (NYSE:OGS) has an RSI value of 70.9, with a recent stock price of $81.00 and a 52-week high of $82.25 [6] - NextEra Energy Inc (NYSE:NEE) has a higher RSI value of 82.3, with a recent stock price of $84.04 and a 52-week high of $86.00 [6] Group 2 - Mizuho analyst upgraded ONE Gas from Neutral to Outperform, raising the price target from $77 to $86, with an 8% stock gain over the past month [6] - Evercore ISI Group initiated coverage on NextEra Energy with an Outperform rating and a price target of $92, with a notable 20% stock gain over the past month [6] - ONE Gas has a momentum score of 50.77 and a value score of 72.13, while NextEra Energy's stock performance reflects strong momentum [6]

Core Viewpoint - Investor sentiment is currently affected by fears of a government shutdown, a slowing labor market, and high stock valuations, leading to a potential interest in dividend stocks for stable returns [1] Group 1: Brookfield Infrastructure Partners (BIP) - Brookfield Infrastructure Partners is a global infrastructure company with diversified assets in utilities, transport, midstream, and data sectors [3] - BIP paid a dividend of 43 cents per unit on September 29, marking a 6% year-over-year increase, with an annualized dividend of $1.72 per unit, resulting in a dividend yield of 5.2% [3] - BMO Capital analyst Devin Dodge reiterated a buy rating on BIP with a price target of $42, citing strong organic growth trends expected to become more evident in upcoming quarters [4] - Dodge noted an increase in high-growth platforms within BIP's portfolio and highlighted significant investment opportunities, particularly in digital infrastructure, with hyperscalers' capital spending projected to rise by 50% this year [5] - BIP's funds from operations per unit (FFO/unit) growth is nearing an inflection point, with a compound annual growth rate of about 10% over the past five years, despite challenges [6] - Dodge believes that as FFO/unit growth increases, it will positively impact distribution growth and valuation [7] Group 2: Ares Capital (ARCC) - Ares Capital is a specialty finance company providing direct loans and investments to private middle-market companies, offering a quarterly dividend of 48 cents per share, equating to an annualized dividend of $1.92 per share and a yield of 9.4% [8] - RBC Capital analyst Kenneth Lee reiterated a buy rating on Ares Capital with a price target of $24, favoring it along with other stocks in the current market scenario [9] - Lee emphasized Ares Capital's competitive advantage through its access to the Ares global credit platform and its potential for above-peer-average return on equity [10] - The experienced senior management team and core earnings per share generation back Ares Capital's dividends, contributing to its strength [11] Group 3: ONE Gas (OGS) - ONE Gas is a regulated natural gas utility serving over 2.3 million customers in Kansas, Oklahoma, and Texas, with a quarterly dividend of 67 cents per share, leading to an annualized dividend of $2.68 per share and a yield of 3.3% [12] - Mizuho analyst Gabe Moreen upgraded OGS to buy from hold, raising the price forecast to $86, citing benefits from Texas legislation and lower interest rates [13] - Moreen anticipates that the Texas HB 4384 legislation could generate an incremental EPS benefit of about 18 cents in fiscal 2026, which will grow with OGS's capital spending [14] - Elevated short-term interest rates previously forced OGS to revise its guidance, but expected Federal Reserve interest rate cuts could ease interest expenses [15] - Moreen highlighted growth opportunities for OGS due to rising natural gas demand from data centers and advanced manufacturers, making it an attractive investment at current valuations [16]

Core Points - ONE Gas, Inc. will release its third quarter 2025 financial results on November 3, 2025, after market close [1] - The conference call to discuss these results will take place on November 4, 2025, at 11 a.m. Eastern Standard Time [2] - ONE Gas is a regulated natural gas utility and is included in the S&P MidCap 400 Index, serving over 2.3 million customers across Kansas, Oklahoma, and Texas [3][4] Company Overview - ONE Gas operates divisions including Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service, making it one of the largest natural gas utilities in the U.S. [3][4] - The company is headquartered in Tulsa, Oklahoma, and provides reliable and affordable energy choices [4]

Core Viewpoint - ONE Gas (OGS) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, indicating a positive earnings outlook that may lead to increased stock prices [1][3]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, influencing their buying and selling decisions, which in turn affects stock prices [4]. ONE Gas Earnings Outlook - For the fiscal year ending December 2025, ONE Gas is expected to earn $4.34 per share, which remains unchanged from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for ONE Gas has increased by 1.4%, indicating a positive trend in earnings estimates [8]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks generating an average annual return of +25% since 1988 [7]. - The upgrade of ONE Gas to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Industry Overview - Natural gas distribution companies transport natural gas from production regions to consumers across the U.S., with a significant underground pipeline network of 2.6 million miles [2] - The shale revolution has increased natural gas production, leading to higher demand due to its clean-burning nature [2] - The U.S. has 3,353 trillion cubic feet of natural gas, and the industry faces challenges such as aging infrastructure and rising investment costs due to interest rate hikes [2] Future Outlook - The U.S. Energy Information Administration (EIA) projects that domestic dry natural gas production will increase in 2025, particularly in the Permian Basin [3] - EIA expects U.S. liquefied natural gas (LNG) export volumes to rise by 25% year-over-year in 2025 and by 6.7% in 2026, highlighting the importance of gas pipelines for transportation to export terminals [3] Interest Rate Impact - The Federal Reserve's recent interest rate cut of 100 basis points to a range of 4.25-4.5% is expected to benefit capital-intensive utilities, allowing for easier access to financing for infrastructure upgrades [4] - Further rate cuts are anticipated in 2026, which would positively impact utility operators planning large investments [4] Competitive Landscape - Natural gas faces increasing competition from renewable energy sources, which are becoming cheaper and more reliable due to advancements in technology and battery storage [5] - The rise of on-site generation reduces reliance on long-distance infrastructure, posing economic risks for new pipeline investments [5] Industry Performance - The Zacks Utility Gas Distribution industry currently ranks 190, placing it in the bottom 22% of the 245 Zacks industries, indicating weak near-term prospects [6] - Earnings estimates for the industry have decreased by 20.9% since September 31, 2024, reflecting a negative outlook [7] Stock Market Performance - Over the past year, the Gas Distribution industry has gained 6.5%, outperforming the Utility sector's growth of 5.4% but lagging behind the Zacks S&P 500 composite's 19.9% increase [9] Valuation Metrics - The industry is trading at a trailing 12-month EV/EBITDA ratio of 11.28X, compared to 18.35X for the Zacks S&P Composite 500 and 15.06X for the sector [12] - Historical trading ranges for the industry have been between 9.55X and 12.4X, with a median of 10.9X over the past five years [12] Company Highlights - **Sempra Energy (SRE)**: Plans to invest $56 billion from 2025-2029, with a current dividend yield of 3.09% and long-term earnings growth projected at 7.01% [18][19] - **Atmos Energy (ATO)**: Invested $2.94 billion in fiscal 2024 and plans to invest $3.7 billion in fiscal 2025, with a current dividend yield of 2.1% and long-term growth of 7.32% [22][23] - **New Jersey Resources (NJR)**: Aims to invest $650-$770 million in fiscal 2025 and $655-$835 million in fiscal 2026, with a current dividend yield of 3.82% [26][27] - **ONE Gas Inc. (OGS)**: Plans to invest $4 billion through 2029, with a current dividend yield of 3.53% and long-term growth projected at 5.56% [30][31]

Core Viewpoint - ONE Gas, Inc. (OGS) is positioned as a strong investment option in the utility sector due to its expanding customer base and strategic investments aimed at improving infrastructure and service efficiency [1] Growth Forecasts for OGS - The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased by nearly 1.4% to $4.34 [2] - The Zacks Consensus Estimate for 2025 sales is projected at $2.44 billion, reflecting a year-over-year increase of 17% [2] - OGS' long-term earnings growth rate is estimated at 5.56% over the next three to five years [2] Debt Position of OGS - OGS has a total debt to capital ratio of 40.44%, which is better than the industry average of 51.09% [3] - The time-to-interest earned ratio at the end of Q2 2025 was 3, indicating the company's strong ability to meet future interest obligations [3] OGS Benefits From Systematic Investments - The company plans a capital investment of $750 million in 2025, focusing on pipeline integrity, service extension, system capacity increase, and cybersecurity [4] - OGS anticipates EPS growth of 4-6% annually through 2029 [4] OGS' Expanding Customer Base - Since 2015, OGS has consistently increased its customer base, with an expected average annual growth of 0.9% through 2028 [5] - As of Q2 2025, OGS served 2,302,000 customers, marking a 0.8% year-over-year increase [5] - The 2025 capital investments include approximately $180 million dedicated to customer growth [5] OGS' Dividend History - OGS is expected to provide an average annual dividend increase of 1-2% through 2029, contingent on board approval [6] - The current quarterly dividend is 67 cents per share, leading to an annualized dividend of $2.68, with a current dividend yield of 3.53% [6] OGS' Stock Price Performance - In the past month, OGS stock has risen by 2.7%, compared to the industry's growth of 2.5% [9]