At Energy Profits in Dividends, we seek to generate a 7%+ income yield by investing in a portfolio of energy stocks while minimizing our risk of principal loss. By subscribing, you will get access to our best ideas earlier than they are released to the general public (and many of them are not released at all) as well as far more in-depth research than we make available to everybody. In addition, all subscribers can read any of my work without a subscription to Seeking Alpha Premium!He is the leader of the i ...

Core Insights - Spire Inc. is positioned to meet rising consumer demand through investments in operations and technology, enhancing efficiency and service quality [1][2] - The company is facing risks related to supplier performance and regulatory compliance [5][6] Investment Plans - Spire plans to invest $840 million in fiscal 2025, an increase from the previous guidance of $790 million, focusing on reliability and new service connections [2][8] - The company has a long-term capital investment plan of $7.4 billion, expecting a rate-based growth of 7-8% [2][8] Customer Experience Enhancements - Spire is installing ultrasonic meters to improve customer experience, having deployed over 350,000 advanced meters in fiscal 2024, benefiting a total of 850,000 customers [3][8] Acquisition Strategy - The company is expanding its customer base through acquisitions, including the recent acquisition of MoGas and Omega pipeline systems, adding approximately 263 miles of interstate natural gas pipes [4] Supply Chain Risks - Spire's natural gas supply is reliant on supplier performance and the capacity of pipeline operators, which poses a risk to financial performance in case of disruptions [5] Regulatory Challenges - The company must comply with various environmental laws, which can increase operating costs and impact profitability if not adhered to [6] Stock Performance - Over the past six months, Spire's stock has increased by 6.3%, contrasting with a 3.4% decline in the industry [7]

Company Overview - Spire Inc. is a natural gas company serving over 1.7 million customers in the United States, founded in 2000 and headquartered in St. Louis, MO [13] - The company focuses on organic growth through systematic investments in infrastructure and innovation, with over 90% of profits derived from regulated operations [13] - Spire operates more than 60,000 miles of pipelines and has segments including Gas Utility, Gas Marketing, and Midstream [13] Investment Ratings - Spire has a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating a moderate investment outlook [14] - The company is considered a potential pick for growth investors, with a Growth Style Score of B and a forecasted year-over-year earnings growth of 9% for the current fiscal year [14] - Recent upward revisions in earnings estimates for fiscal 2025 have increased the Zacks Consensus Estimate to $4.50 per share [14] Performance Metrics - Spire has an average earnings surprise of 2.5%, suggesting a history of exceeding earnings expectations [14] - The combination of a solid Zacks Rank and strong Growth and VGM Style Scores positions Spire as a noteworthy option for investors [15]

Core Viewpoint - Spire Global (NYSE: SPIR) has successfully sold its maritime business segment, which was anticipated in previous analyses, and this move is expected to help eliminate its debt [1]. Group 1: Company Developments - The maritime segment sale has materialized, aligning with earlier predictions [1]. - The company is focusing on value investing and maintaining a long-term investment perspective [1]. Group 2: Analyst Position - The analyst holds a beneficial long position in Spire Global shares through various financial instruments [2]. - The article reflects the analyst's personal opinions and is not influenced by external compensation [2].

Company Overview - Spire Inc. is a natural gas company serving over 1.7 million customers in the United States, founded in 2000 and headquartered in St. Louis, MO [11] - The company generates more than 90% of its profits from regulated operations, providing clarity on future earnings [11] - Spire operates over 60,000 miles of pipelines and has segments including Gas Utility, Gas Marketing, and Midstream [11] Investment Ratings - Spire Inc. holds a Zacks Rank of 2 (Buy) and has a VGM Score of A, indicating strong potential for investment [12] - The company is considered a top pick for growth investors, with a Growth Style Score of B, forecasting a year-over-year earnings growth of 9% for the current fiscal year [12] - The Zacks Consensus Estimate for Spire's earnings has increased to $4.50 per share, with one analyst revising their estimate upwards in the last 60 days [12] Performance Metrics - Spire boasts an average earnings surprise of 2.5%, reflecting its ability to exceed earnings expectations [12] - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Spire is recommended for investors' consideration [13]

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]

Financial Performance - Operating revenues for the three months ended March 31, 2025, were $1,051.3 million, a decrease of 6.8% compared to $1,128.5 million for the same period in 2024[9]. - Net income for the three months ended March 31, 2025, was $209.3 million, slightly up from $204.3 million in the same period of 2024, representing a 0.5% increase[11]. - Operating income for the six months ended March 31, 2025, was $455.2 million, an increase of 4.0% from $437.8 million for the same period in 2024[9]. - Total operating expenses for the three months ended March 31, 2025, were $744.9 million, down 10.2% from $829.9 million in the same period of 2024[9]. - Basic earnings per common share for the three months ended March 31, 2025, were $3.52, compared to $3.59 for the same period in 2024, reflecting a decrease of 1.9%[9]. - The company reported a comprehensive income of $207.6 million for the three months ended March 31, 2025, compared to $210.8 million for the same period in 2024[11]. - Net income for the six months ended March 31, 2025, was $290.6 million, slightly up from $289.4 million for the same period in 2024, indicating stable performance[24]. - Adjusted earnings for the three months ended March 31, 2025, were $214.4 million, compared to $196.6 million for the same period in 2024, reflecting an increase of about 9.4%[115]. - Adjusted earnings for the six months ended March 31, 2025, were $295.5 million, up from $279.3 million in 2024, representing a growth of 5.9%[117]. Assets and Liabilities - Total assets as of March 31, 2025, were $11,346.7 million, an increase of 4.5% from $10,860.7 million as of March 31, 2024[14]. - Long-term debt (less current portion) as of March 31, 2025, was $3,348.5 million, a decrease of 9.6% from $3,704.4 million as of March 31, 2024[17]. - Total assets as of March 31, 2025, amounted to $6,127.4 million, up from $5,754.9 million as of March 31, 2024, indicating a growth of 6.5%[30]. - Total shareholder's equity increased to $2,205.0 million as of March 31, 2025, compared to $1,963.7 million as of March 31, 2024, reflecting a growth of 12.3%[33]. - Long-term debt (less current portion) was $1,803.8 million as of March 31, 2025, compared to $1,486.2 million as of March 31, 2024, indicating an increase of 21.3%[33]. - Total liabilities at fair value were reported at $39.2 million, with $23.4 million classified under Level 1 and $42.7 million under Level 2[102]. Cash Flow and Capital Expenditures - Cash and cash equivalents increased to $15.2 million as of March 31, 2025, compared to $4.5 million as of March 31, 2024[14]. - Capital expenditures for the six months ended March 31, 2025, were $479.2 million, an increase from $409.3 million in the prior year, indicating a focus on investment in growth[24]. - Net cash provided by operating activities for the six months ended March 31, 2025, was $453.8 million, down from $559.4 million in the same period of 2024, suggesting a decrease in operational efficiency[24]. - Cash and cash equivalents at the end of the period were $3.3 million, an increase from $1.5 million at the beginning of the period[45]. - Capital expenditures for the six months ended March 31, 2025, totaled $322.1 million, compared to $255.1 million in 2024, representing an increase of 26.3%[39]. Shareholder Equity and Dividends - Total shareholders' equity increased to $3,508.7 million as of March 31, 2025, compared to $3,390.3 million a year earlier, reflecting a growth of approximately 3.5%[21]. - The company declared dividends of $90.0 million on common stock and $7.4 million on preferred stock during the six months ended March 31, 2025[24]. - Common stock issued during the six months ended March 31, 2025, amounted to 1,206,134 shares, raising $74.8 million, compared to 4,490,282 shares issued in the same period of 2024, which raised $286.0 million[21]. Segment Performance - The Gas Utility segment remains the core business segment, contributing significantly to revenue and earnings, with operations in Missouri and Alabama[57]. - Revenues from external customers in the Gas Utility segment for the three months ended March 31, 2025, were $970.1 million, down from $1,072.4 million in the same period of 2024, a decrease of about 9.5%[115]. - The Gas Marketing segment generated revenues of $53.6 million for the three months ended March 31, 2025, compared to $46.0 million in the same period of 2024, an increase of about 16.5%[115]. - The Midstream segment reported revenues of $27.1 million for the three months ended March 31, 2025, up from $10.0 million in the same period of 2024, representing a significant increase of approximately 171%[115]. Regulatory and Market Environment - The company’s regulatory environment supports the continued use of regulatory accounting principles, ensuring recoverability of regulatory assets and liabilities[59]. - Spire Missouri's proposed general rate case includes a base rate increase request of $289.5 million, reflecting a 32% increase in rate base since the last filing[81]. - The Infrastructure System Replacement Surcharge (ISRS) allows Spire Missouri to recover $53.6 million from customers for eligible capital projects through August 2024[81]. - The common equity ratio assumed in Spire's rate case filing is 55.0%, with a proposed return on equity of 10.5%[81]. Challenges and Future Outlook - The company faces challenges including volatility in gas prices and potential disruptions from severe weather events, which could affect operational margins and competitive positioning[143]. - Future outlook indicates a cautious approach due to fluctuating commodity prices, particularly in natural gas, which has seen a significant drop[103]. - The company plans to explore potential mergers and acquisitions to strengthen its market position and diversify its offerings[103].

Core Insights - Spire reported a revenue of $1.05 billion for the quarter ended March 2025, reflecting a decrease of 6.8% year-over-year and falling short of the Zacks Consensus Estimate of $1.09 billion by 3.97% [1] - The company's EPS for the quarter was $3.60, an increase from $3.45 in the same quarter last year, but below the consensus estimate of $3.70, resulting in an EPS surprise of -2.70% [1] Revenue Breakdown - Gas Utility operating revenues were $970.20 million, down 9.6% year-over-year, and below the average estimate of $982.65 million [4] - Gas Marketing operating revenues reached $53.60 million, exceeding the average estimate of $37.64 million, with a year-over-year increase of 16.5% [4] - Midstream operating revenues were $38.40 million, significantly above the average estimate of $28.36 million, marking a year-over-year increase of 78.6% [4] - Other operating revenues totaled $4.90 million, surpassing the average estimate of $4.07 million, with a year-over-year change of 19.5% [4] - Eliminations reported a figure of -$15.80 million, worse than the average estimate of -$4.47 million, with no year-over-year change [4] Operating Income Analysis - Gas Marketing operating income was $12.40 million, below the average estimate of $22.55 million [4] - Midstream operating income reached $21.80 million, exceeding the average estimate of $15.54 million [4] - Gas Utility operating income was $272 million, slightly below the average estimate of $279.87 million [4] - Other operating income was $0.20 million, significantly lower than the average estimate of $15.26 million [4] Stock Performance - Over the past month, Spire's shares have returned -2.2%, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $3.6 per share for Q2 FY 2025, an increase from $3.45 per share in the same quarter last year, reflecting strong growth in utility and midstream segments [7] - Adjusted earnings for the quarter totaled over $214 million, an increase of almost $18 million compared to the previous year [17] - The Gas Utilities segment had earnings of approximately $195 million, over $7 million higher than last year, driven by increased ISRS revenues and usage [18] Business Line Data and Key Metrics Changes - The utility CapEx increased nearly 27% year over year, focusing on upgrading distribution infrastructure and connecting more homes to natural gas [14] - Midstream segment earnings showed strong growth due to new contracts and higher rates on contract renewals [19] - Marketing segment earnings were strong but slightly lower than the prior year due to reduced market volatility [20] Market Data and Key Metrics Changes - The labor market in St. Louis has fully recovered, reaching pre-pandemic employment levels, which is expected to drive economic growth [12] - The Missouri Public Service Commission staff recommended a $19 million revenue increase in the infrastructure system replacement surcharge [8] Company Strategy and Development Direction - The company remains focused on organic growth, infrastructure investment, and continuous improvement, with a long-term EPS growth target of 5% to 7% [11][26] - A ten-year capital investment plan of $7.4 billion is in place to support growth [11] - The company is committed to modernizing systems and enhancing regulatory engagement to maximize value for stakeholders [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal 2025 adjusted earnings guidance of $4.4 to $4.6 per share, despite challenges from weather-related margin headwinds [22][26] - The company is focused on executing its capital investment plan and driving operational excellence to strengthen utility and gas-related business performance [11][26] Other Important Information - The company is increasing its fiscal 2025 capital investment target by $50 million to $840 million, with significant investments in both utility and midstream segments [14] - The Missouri rate case is ongoing, with proposed revenue increases and discussions on weather mechanisms being a key focus [15][42] Q&A Session Summary Question: Can you speak about 1H trends and full-year guidance? - Management acknowledged margin weakness in Missouri and adjusted guidance accordingly, while midstream performance exceeded expectations [31][32] Question: What are the prospects for a settlement within the rate case? - Management indicated that settlement discussions are anticipated, with community meetings and public hearings scheduled [46] Question: Can you elaborate on the weather mechanism in the rate case? - Management confirmed that the weather mechanism is a significant focus and they are working on options to address it with stakeholders [42][44] Question: How does the passage of SB4 affect future rate cases? - Management stated that the first opportunity to file based on a future test year will be in July 2026, and they are focused on the current rate case [51][53] Question: How does the guidance modification reflect the utility business's earnings power? - Management confirmed that fixing the weather mechanism could restore earnings power, while midstream and marketing businesses show slight structural uplift [61][64]

Financial Data and Key Metrics Changes - The company reported adjusted earnings of $3.6 per share for Q2 FY 2025, an increase from $3.45 per share a year ago, reflecting strong growth in utility and midstream segments [8][12] - Adjusted earnings for the quarter totaled over $214 million, an increase of almost $18 million compared to the previous year [18] - The Gas Utilities segment had earnings of approximately $195 million, over $7 million higher than last year, driven by increased ISRS revenues and usage [19] Business Line Data and Key Metrics Changes - The utility CapEx increased nearly 27% year over year, focusing on upgrading distribution infrastructure and connecting more homes to natural gas [15] - Midstream segment earnings showed strong growth due to new contracts and higher rates on contract renewals [19] - Marketing segment earnings were strong but slightly lower than the prior year due to reduced market volatility [19] Market Data and Key Metrics Changes - The company experienced colder temperatures in both Missouri and Alabama compared to last year, impacting volumetric margins [20] - The weather mitigation adjustment in Missouri was ineffective, leading to misalignment between revenues and usage [20] Company Strategy and Development Direction - The company is focused on organic growth, infrastructure investment, and continuous improvement, with a long-term EPS growth target of 5% to 7% [12][27] - A ten-year capital investment plan of $7.4 billion is in place, with an increased fiscal 2025 capital investment target of $840 million [15][12] - The company aims to modernize systems and enhance regulatory engagement to maximize value for customers and stakeholders [7][12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal 2025 adjusted earnings guidance of $4.4 to $4.6 per share, despite challenges from weather-related margin headwinds [12][22] - The company is committed to executing its capital investment plan and driving operational excellence [12][27] - Management highlighted the positive economic developments in St. Louis, including job growth from Boeing's new contracts [13] Other Important Information - The Missouri Public Service Commission staff recommended a $19 million revenue increase in the infrastructure system replacement surcharge [10] - Senate Bill four was signed into law, allowing utilities to set rates based on projected costs, which is expected to enhance system reliability [11] Q&A Session Summary Question: Can you speak about 1H trends and full-year guidance? - Management acknowledged margin weakness in Missouri but noted strong performance in the midstream segment, indicating a mixed outlook for the utility business [32][34] Question: Is weather the sole deviation on the utility side? - Management confirmed that weather-related margin issues were the main driver of the deviation, with some minor additional factors [34] Question: Is the $8 million increase in midstream guidance a one-off? - Management indicated that while there is some optimization contributing to the increase, it suggests a potential uplift in run rate over time [36] Question: What are the prospects for a settlement within the rate case? - Management expressed optimism about engaging in constructive discussions with stakeholders regarding the rate case [48][49] Question: Timing on future rate cases after SB4? - Management clarified that the first opportunity to file based on a future test year would be in July 2026, with current focus on the ongoing rate case [56] Question: Will there be a rulemaking process before filing for a future test year? - Management confirmed that rulemaking is required and they will actively participate once it begins [72]