Southwest Gas (SWX) Q2 Earnings Lag Estimates, Revenues Down Y/Y

Core Viewpoint - Southwest Gas Holdings Inc. (SWX) reported disappointing second-quarter 2024 results, with significant declines in both operating earnings and total revenues compared to the previous year and consensus estimates [1][2]. Financial Performance - Operating earnings for Q2 2024 were 31 cents per share, missing the Zacks Consensus Estimate of 43 cents by 27.9% and down 34% from 47 cents in the same quarter last year [1]. - Total operating revenues were $1.18 billion, falling short of the Zacks Consensus Estimate of $1.23 billion by 3.9% and decreasing 8.7% from $1.29 billion in the prior-year quarter [2]. Expense and Income Analysis - Utility infrastructure service expenses totaled $604.5 million, down 15.5% from $715.7 million in the year-ago quarter [3]. - Total operating income was $33.1 million, compared to $53.2 million in the same quarter last year [3]. Operational Metrics - Total system throughput for the first six months of 2024 was 123.53 million dekatherms, an 8.3% decrease from 134.77 million dekatherms in the first half of 2023 [3]. Capital and Debt Position - As of June 30, 2024, cash and cash equivalents were $599.6 million, a significant increase from $106.5 million as of December 31, 2023 [5]. - Long-term debt, less current maturities, rose to $5.06 billion as of June 30, 2024, compared to $4.61 billion at the end of 2023 [5]. Future Guidance - The company anticipates net income for the Natural Gas Distribution segment in 2024 to be between $233 million and $243 million, with capital expenditures expected to be $830 million for customer growth and system improvements [6]. - For the period of 2024-2026, capital expenditure is projected to be $2.4 billion, with a utility rate base CAGR of 6.5-7.5% [6]. Market Position - Southwest Gas currently holds a Zacks Rank of 5 (Strong Sell), indicating a negative outlook in the market [7].