Financial Data and Key Metrics Changes - The utility achieved record annual operating margin performance and a return on equity over 8% for the second consecutive year [10] - Utility net income is expected to be in the range of $265 million to $275 million for 2025, driven by margin improvements and cost management efforts [11][51] - Utility operating margin increased by $72.5 million in 2024 compared to 2023, primarily due to $66 million of increased rate relief [37] Business Line Data and Key Metrics Changes - The utility saw customer growth with approximately 41,000 new meter sets added in the last twelve months [18] - The utility's operating margin improvement was partially offset by higher interest expenses and lower other income [32] Market Data and Key Metrics Changes - Economic activity and demand for natural gas service remain strong, with significant in-migration driving customer growth [27] - Population growth projections for Arizona and Nevada are expected to outpace the national average over the next five years [28] Company Strategy and Development Direction - The company is focused on becoming a premier fully regulated natural gas utility and is advancing its regulatory strategy [8] - Plans for robust capital spending are driven by economic activity in service territories, with expected investments of about $4.3 billion over the next five years [29][53] - The company is committed to separating Century and is evaluating market conditions for executing disposition transactions [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving regulatory and operational priorities in 2025, despite challenges [16] - The company anticipates that regulatory efforts and a strong regional economic outlook will drive results above 2024 levels [51] Other Important Information - The company has over $360 million in cash on hand, enabling it to honor commitments and execute its 2025 strategy [19] - The company plans to maintain a competitive dividend in 2025 while targeting an investment-grade balance sheet [45][54] Q&A Session Summary Question: Is there a potential for more linear growth with formula rates in Arizona? - Management indicated that under the current regulatory structure, growth is nonlinear, but a formula rate could lead to more linear growth in the future [61] Question: How do market conditions affect the timing of Century's separation? - Management is monitoring market conditions and assessing options for separation, emphasizing that it is not limited to price considerations [63][66] Question: Does the updated utility net income CAGR assume any impact from the pending SIM mechanism? - The updated utility net income CAGR does not include the SIM tracker or any pending regulatory filings [82] Question: What are the next steps regarding the formula rate plan? - Management is comfortable with the timing and is monitoring other utilities' filings to inform their approach for future cases [89] Question: Will favorable regulatory outcomes improve earned ROE? - Management expects that favorable regulatory outcomes, such as a tracker or formula rate, would lead to improvements in earned ROE [92]

Southwest Gas Holdings Inc. (SWX) recorded fourth-quarter 2024 operating earnings of $1.39 per share, which beat the Zacks Consensus Estimate of $1.15 by 20.9%. The bottom line also increased 15.8% from the year-ago quarter’s $1.20.Find the latest earnings estimates and surprises on Zacks Earnings Calendar.SWX reported earnings of $3.16 for 2024 compared with $3.64 per share in 2023, which reflects a year-over-year decrease of 13.2%.SWX’s Total Revenues Operating revenues totaled $1.270 billion, which misse ...

Core Viewpoint - Southwest Gas reported quarterly earnings of $1.39 per share, exceeding the Zacks Consensus Estimate of $1.15 per share, and showing an increase from $1.13 per share a year ago, representing an earnings surprise of 20.87% [1][2] Financial Performance - The company posted revenues of $1.27 billion for the quarter ended December 2024, which was 7.46% below the Zacks Consensus Estimate and a decrease from $1.37 billion in the same quarter last year [2] - Over the last four quarters, Southwest Gas has surpassed consensus EPS estimates two times and topped consensus revenue estimates only once [2] Stock Performance - Southwest Gas shares have increased approximately 9.3% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.90 on revenues of $1.71 billion, and for the current fiscal year, it is $3.69 on revenues of $5.41 billion [7] - The trend for estimate revisions ahead of the earnings release has been favorable, which may influence future stock movements [6][8] Industry Context - The Utility - Gas Distribution industry, to which Southwest Gas belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Regulatory and Compliance - Southwest Gas filed a general rate case in Arizona in February 2024, with rates expected to be effective in April 2025[41]. - Southwest Gas reports GHG emissions to the U.S. and State of California EPA, contributing to environmental compliance efforts[65]. - Southwest Gas successfully met its 2024 compliance obligations by surrendering a sufficient number of allowances and carbon offsets prior to November 1, 2024[67]. - In 2022, Southwest Gas purchased carbon offsets to meet compliance obligations, which can only satisfy a portion of these obligations[67]. - California's new legislation requires companies to disclose GHG emissions and climate-related financial risks, with reporting obligations starting in 2026[69][70]. Energy Supply and Sustainability - For the 2024/2025 heating season, firm fixed-price physical commodity purchases ranged from approximately $4.18 to approximately $6.53 per dekatherm[48]. - Southwest Gas acquired natural gas from 44 suppliers in 2024, ensuring competitive pricing and reliability in its supply portfolio[45]. - The natural gas market has shown stability in 2024, with prices remaining competitive compared to other energy forms[56]. - Southwest Gas operates a 233,000 dekatherm above-ground LNG facility in southern Arizona to enhance service reliability[54]. - The company has taken steps to align with energy efficiency initiatives and support renewable energy projects in its jurisdictions[60]. - The company is investigating blending hydrogen into its gas supply as part of its sustainability efforts[64]. - Southwest Gas is in the process of completing the purchase of selected renewable natural gas (RNG) supplies, with no expected direct impact on earnings[68]. Workforce and Diversity - Centuri operates in 87 primary locations across 45 U.S. states and two Canadian provinces, serving over 400 customers in 2024[78]. - Approximately 80% of Centuri's revenue in 2024 was earned under unit-price and time & materials contracts[75]. - Centuri's workforce includes 8,687 regular full-time equivalent employees, with a majority represented by unions[84]. - Southwest Gas had 2,435 regular full-time equivalent employees as of December 31, 2024, with an average tenure of approximately 10 years[83]. - The company has implemented a scholarship program that awards grants to minority students who are dependents of Centuri employees[85]. - Southwest Gas and Centuri are committed to creating a diverse and inclusive workforce through various employee engagement initiatives[86]. Financial Performance and Challenges - The company is facing variability in gas volume sold and changes in gas procurement practices, impacting revenue[20]. - Future acquisition-related costs and the ability to successfully integrate newly acquired businesses are critical for growth[20]. - The company is evaluating the impact of inflation on operations and maintenance expenses, including fuel costs[20]. - There are ongoing assessments regarding goodwill and other intangible assets, which may affect financial reporting[20]. - The company has no assurance that its financing and operating expense trends will continue as planned[20]. - The impact of regulatory changes and geopolitical influences on costs is a significant concern for the company[20]. - The company is monitoring the effects of customer supply chain challenges on its operations[20]. - The timing and success of the Centuri separation following the IPO are crucial for stock price and credit ratings[20]. - The company is cautious about relying on forward-looking statements due to potential changes in market conditions[21]. - The company is focused on maintaining compliance with debt covenants to ensure financial stability[20].

Financial Performance - Consolidated net income for Q4 2024 was $92.5 million, or $1.28 per diluted share, compared to $72.9 million, or $1.01 per diluted share in Q4 2023, reflecting a year-over-year growth of 27%[1] - Full-year 2024 consolidated net income reached $198.8 million, or $2.76 per diluted share, up from $150.9 million, or $2.13 per diluted share in 2023, marking a 32% increase[1] - Adjusted net income for the twelve months ended December 31, 2024, was $198.8 million, up from $150.9 million in 2023, indicating a year-over-year increase of approximately 31.7%[39] - Basic earnings per share for Q4 2024 were $1.29, compared to $1.02 in Q4 2023, reflecting a year-over-year increase of 26.5%[39] - The diluted earnings per share for Q4 2024 was $1.28, up from $1.01 in Q4 2023, reflecting a 27% increase[42] Utility Segment Performance - The utility segment reported net income of $97.2 million in Q4 2024, an increase from $91.7 million in Q4 2023, driven by improved operating margin and lower O&M expenses[2] - Full-year 2024 utility net income was $261.2 million, compared to $242.2 million in 2023, representing an 8% growth[2] - Operating margin for the utility segment increased by $30 million in Q4 2024, primarily due to new general rates in Nevada and customer growth[16] - The utility achieved a return on equity (ROE) of 8.1% for the year, maintaining above 8% ROE for the second consecutive year[12] - The contribution to consolidated results from natural gas distribution was $261,176 for the twelve months ended December 31, 2024, compared to $242,226 in 2023, reflecting an increase of 8%[44] Revenue and Expenses - Total revenues decreased by $262 million, or 9%, year-over-year, primarily due to a $114 million reduction in offshore wind revenues, partially offset by a $50 million increase in emergency restoration services revenue[25] - Operating margin for the full year 2024 was $1,325.2 million, compared to $1,252.7 million in 2023, representing a year-over-year increase of 5.8%[39] - The company recorded a $202 million, or 8%, decrease in infrastructure services expenses compared to 2023, mainly due to reduced work under offshore wind projects[25] Operational Metrics - The company added approximately 41,000 new meter sets in 2024, reflecting a 1.8% growth rate[12] - Total system throughput for 2024 is 219,428,688 dekatherms, a decrease from 226,594,170 dekatherms in 2023[46] - Residential system throughput for 2024 is 77,066,236 dekatherms, down from 86,965,340 dekatherms in 2023[46] - Small commercial system throughput for 2024 is 33,289,392 dekatherms, a decrease from 35,091,975 dekatherms in 2023[46] - Large commercial system throughput for 2024 is 10,838,926 dekatherms, slightly down from 11,091,489 dekatherms in 2023[46] - Industrial/Other system throughput for 2024 is 5,535,745 dekatherms, down from 7,759,919 dekatherms in 2023[46] Future Outlook - The company expects 2025 net income guidance to be between $265 million and $275 million, with capital expenditures projected at approximately $880 million[20] - The utility segment filed three rate cases in 2024, including a $126 million general rate case in Arizona, with final decisions expected in 2025[15] - The company plans to update investors on its 81% ownership stake in Centuri, which may involve a sale or distribution of shares[27] Corporate Developments - Centuri Holdings, Inc. completed its IPO in April 2024, with net proceeds primarily used to repay a portion of Centuri's debt[11] - Centuri's utility infrastructure services segment reported a net loss of $13.1 million in 2024, compared to a net income of $19.7 million in 2023, reflecting a significant decline in performance[25] - The company reported a net loss of $12,863 for corporate and administrative expenses in Q4 2024, a slight improvement from a loss of $13,542 in Q4 2023[42] Market Metrics - Market value to book value per share at quarter end is 145%[46] - Twelve months to date return on equity for the total company is 5.8%[46] - Gas segment return on equity is 8.1%[46] - Common stock dividend yield at quarter end is 3.5%[46]

Delivers 8.1% Utility ROE and Earnings Growth of ~8.0% Year-over-YearO&M/Customer Flat Year-over-Year Reflecting Progress on Utility Cost OptimizationInitiated 2025 Utility Net Income and Capital Expenditures Guidance and Forward-Looking Utility Net Income CAGR and Rate Base CAGR GuidanceLAS VEGAS, Feb. 26, 2025 /PRNewswire/ -- Southwest Gas Holdings, Inc. (NYSE: SWX) ("Southwest Gas Holdings" or "Company") today reported fourth quarter 2024 consolidated net income of $92.5 million, or $1.28 per diluted sha ...

Dividend Announcement - Southwest Gas Holdings, Inc. has declared a second quarter cash dividend of $0.62 per share, payable on June 2, 2025, with a record date of May 15, 2025 [1] - The annualized dividend equates to $2.48 per share, and the company has consistently paid quarterly dividends since going public in 1956 [1] Company Overview - Southwest Gas Holdings, Inc. is based in Las Vegas, Nevada, and operates through its primary subsidiary, Southwest Gas Corporation, which focuses on purchasing, distributing, and transporting natural gas [3] - The company serves over 2 million residential, commercial, and industrial customers in Arizona, Nevada, and California, emphasizing safe and reliable service while innovating sustainable energy solutions [3] - Additionally, Southwest Gas Holdings, Inc. is the majority owner of Centuri Holdings, Inc., which provides utility infrastructure services across North America [3]

Group 1 - The company, Southwest Gas Holdings, Inc., will host its fourth quarter and year-end earnings conference call on February 26, 2025, at 11:00 AM ET [1] - A news release will be issued before the markets open on the same day [1] - The conference call will be available via live webcast on the company's website [1] Group 2 - For those unable to participate in the live webcast, the call will be archived on the company's website [2] - A digital replay of the call can be accessed starting one hour after the call ends, with specific dialing instructions provided [2] - The digital replay will be available until 4:30 PM ET on March 5, 2025 [2]

Core Viewpoint - Southwest Gas Holdings Inc. (SWX) is implementing systematic investment plans and accretive acquisitions to enhance its performance, supported by consistent customer growth in its natural gas segment [1] Group 1: Investment Plans and Financials - The company plans a capital investment of $2.4 billion from 2024 to 2026, with $750 million invested in 2023, reflecting a 6% increase from 2022 [2] - The expected capital expenditure for 2024 is $830 million, aimed at supporting customer growth, system improvements, and pipe replacement programs [2] - New natural gas rates, rising demand from an expanding customer base, and efficient expense management are anticipated to boost net income [4] Group 2: Customer Base and Demand - SWX has a diversified and growing customer base across Arizona, Nevada, and California, having installed 41,000 first-time meter sets in the year ending September 30, 2024 [3] - The ongoing increase in the customer base is expected to drive demand and enhance company performance [3] Group 3: Performance Expectations - The company anticipates a rate base growth of 6.5-7.5% over the next three years, with plans to achieve flat operation and maintenance (O&M) expenses per customer during 2024-2026 [5] - Improvements in economic conditions and strong demographics are expected to further drive performance [5] Group 4: Risks and Dependencies - SWX's reliance on interstate pipelines for natural gas transportation poses risks; any interruption in service could impact its ability to meet customer demand [6] - The company does not own significant assets beyond its operating subsidiaries, making it dependent on these units for financial needs [7] Group 5: Stock Performance - Over the past year, SWX shares have increased by 24.7%, slightly outperforming the industry growth of 24.6% [8]

Financial Data and Key Metrics Changes - The company expects full-year utility net income to finish within the top half of the guidance range of $233 million to $243 million [9] - Consolidated adjusted EPS was $0.09 per share during Q3 2024, reflecting a decrease of $0.08 per share compared to Q3 2023 [33] - The utility operating margin increased by nearly $23 million compared to the same period last year, driven by increased rate relief and customer growth [39] Business Line Data and Key Metrics Changes - The utility experienced strong growth with approximately 41,000 new meter sets added during the last 12 months [16] - Centuri's consolidated results were lower for the quarter due to lower volumes of MSA and bid work, and operational issues led to higher costs [34][37] - The utility's O&M increased by $7 million primarily related to leak survey and line locating activities, but the company aims to keep O&M costs flat on a per-customer basis through 2026 [40] Market Data and Key Metrics Changes - Economic activity and demand for natural gas service remain strong, particularly driven by projects like the TSMC Semiconductor Manufacturing Facility in North Phoenix [26] - The surrounding area of the TSMC project is forecasted to see a 95% increase in population over the next 25 years, which would significantly increase the customer base for Southwest Gas [27] - The company is fielding inquiries for large-scale data center developments in Arizona and Nevada, indicating strong potential for future growth [29] Company Strategy and Development Direction - The company is focused on becoming a premier fully regulated natural gas utility and is progressing with the separation of Centuri [6][12] - The strategic priorities include optimizing utility operations and maintaining a strong investment-grade balance sheet while executing on regulatory strategies [55] - The company reaffirms its expected rate base compound annual growth rate of 6.5% to 7.5% from 2024 to 2026 [53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing strong regional economic outlook and positive regulatory outcomes [50] - The company is optimistic about achieving a flat O&M per customer trend and expects net income growth to be nonlinear due to regulatory cycles [52] - Management highlighted the importance of ongoing regulatory discussions and the potential for constructive outcomes in rate cases [22][23] Other Important Information - The company finished Q3 2024 with over $450 million in cash and nearly $1 billion in liquidity, indicating strong financial health [15][33] - The company does not expect to issue equity this year due to strong cash balances and ongoing collections [63] - The company is committed to maintaining a competitive dividend while evaluating Centuri's separation options [53] Q&A Session Summary Question: Timing of future separation update for Centuri - Management stated there is no specific timeframe for the separation, but the appointment of a new CEO at Centuri is a positive step forward [57] Question: Settlement backdrop in Arizona rate case - Management indicated that the staff is supportive of the proposed system improvement mechanism, and discussions have been constructive [58][60] Question: Changes in financing plan - The change in the financing plan is primarily due to the collection of the PGA and strong cash balances, leading to no need for equity issuance this year [63][64] Question: Impact of recent elections on regulatory environment - Management does not anticipate any significant impact on the procedural schedule or settlement opportunities due to the recent elections [66][67]