Summary of NWN Q1 2026 Earnings Call

1Key Financial Results and Metrics

Adjusted Earnings Per Share (EPS): $2.33, up from $2.28 year-over-year.

Adjusted Net Income: Increased by $5.7 million.

Northwest Natural Gas: Net income rose by $2.7 million; EPS decreased by $0.02 due to equity financing.

C Energy: EPS increased by $0.08, driven by strong organic customer growth of 16%.

Northwest Natural Water: EPS was flat, impacted by higher operating and depreciation expenses, but supported by customer growth.

Full-Year 2026 EPS Guidance: Reaffirmed at $2.95 to $3.15 per share.

Long-Term EPS Growth Target: Maintained at 4% to 6%, potentially increasing to 5% to 7% with the MX3 project.

2Strategic Updates and Business Highlights

Regulatory Initiatives:

Filed a multi-party settlement in Washington for a three-year rate increase starting August 2026.

Engaged in multiyear rate case rulemaking in Oregon, with an alternative rate mechanism filed for a 1.5% increase beginning October 2026.

C Energy filed a general rate case in Texas, requesting a $12 million revenue increase.

Customer Growth:

C Energy reported 16% organic growth; Northwest Natural Water achieved 4.1% overall customer growth.

A backlog of over 10,000 connections in Texas for water and wastewater services.

Investment Projects: The MX3 gas storage project is progressing, expected to enhance capacity and reliability by 2029.

3Forward Guidance and Outlook

2026 Outlook: Strong momentum with solid execution expected to continue throughout the year.

Customer Growth Projections: C Energy anticipates 15% to 20% annual customer growth through 2030.

Capital Expenditures: Expected to be between $500 million and $550 million in 2026, funded through operating cash flows and a balanced mix of debt and equity.

4Bad News, Challenges, or Points of Concern

Economic Conditions: Challenges in Oregon's economy noted, with a slowdown in housing starts and macro indicators affecting growth.

Regulatory Lag: Potential for regulatory lag impacting the timing of earnings recognition from rate base growth.

Market Slowdown: Acquisition opportunities in the water sector have slowed, although the company remains focused on organic growth.

5Notable Q&A Insights

Economic Conditions: Management acknowledged a slowdown in the Oregon economy but emphasized that customer growth aligns with expectations.

Multiyear Rate Structure: Clarity on Oregon's multiyear rate structure is anticipated next year, with interim rate case filings ongoing.

C Energy Growth: No acquisitions reflected in the 16% growth; organic growth is strong, with ongoing opportunities for future acquisitions.

GRIP Mechanism: The timeline for the GRIP filing is approximately six months, with expectations for new rates by Q4 2026. Overall, NWN reported solid financial performance in Q1 2026, with a positive outlook driven by strategic regulatory initiatives and customer growth, despite facing economic challenges and regulatory timing issues.