Spire(US:SR)2025-04-30 14:00Financial 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]