SR-PA — Spire Inc.

Summary of Spire Inc.'s Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Earnings: Reported at $108 million, or $1.77 per share, up from $81 million, or $1.34 per share, year-over-year.
• Segment Performance:
  • Gas Utilities: Earnings of $104 million, a 33% increase due to new rates in Missouri and higher margins in Alabama.
  • Gas Marketing: Earnings rose to $4.5 million, up $2.3 million from last year.
  • Midstream: Earnings increased to $12.7 million, driven by additional capacity at Spire Storage.
  • Corporate Costs: Adjusted loss of $12.7 million, reflecting higher corporate costs and interest expenses.

2. Strategic Updates and Business Highlights

• Weather Impact: The company successfully managed operations during winter storm Fern, which resulted in record natural gas demand.
• Regulatory Actions: New rates in Missouri effective October; a $30.3 million revenue increase request filed for infrastructure improvements.
• Acquisition Progress: The acquisition of Piedmont, Tennessee is on track for Q1 2026 closure, with financing plans in place to maintain credit ratings.
• Capital Expenditures: Invested $230 million in Q1, primarily in utility operations, with a projected 2026 CapEx of $800 million to $900 million.

3. Forward Guidance and Outlook

• 2026 Adjusted EPS Guidance: Reaffirmed at $5.25 to $5.45 per share.
• 2027 Adjusted EPS Guidance: Reaffirmed at $5.65 to $5.85 per share.
• Long-term Growth Target: 5% to 7% adjusted EPS growth supported by utility investments and a ten-year capital plan of $11.2 billion.

4. Bad News, Challenges, or Points of Concern

• Increased Costs: Higher O&M, depreciation, and interest expenses are impacting margins.
• Storage Asset Sales: The evaluation process for selling natural gas storage assets is taking longer than expected, although interest remains strong.
• Regulatory Risks: Upcoming Missouri rate case filing may introduce uncertainties, as it will be the first future test year case.

5. Notable Q&A Insights

• Gas Marketing Performance: The company expressed satisfaction with its hedging strategies during market volatility, indicating effective customer protection.
• Storage Asset Sale Timing: An announcement regarding the storage asset sales is expected later this quarter, with a focus on achieving the right value.
• Economic Development: The company is actively pursuing opportunities for large loads and generation facilities in its service territories but has no immediate announcements.
• Integration of Tennessee Acquisition: Emphasis on a seamless transition for customers and employees post-acquisition, with a dedicated team managing the integration process.

Overall, Spire Inc. demonstrated strong financial performance in Q1 2026, supported by effective operational management and strategic initiatives, while also facing challenges related to cost pressures and regulatory dynamics.