SR-PA — Spire Inc.

Summary of Spire Inc.'s Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Earnings: $108 million, or $1.77 per share, up from $81 million, or $1.34 per share, year-over-year.
• Gas Utilities Segment: Earnings increased by over 33% to $104 million, driven by new rates in Missouri and higher margins in Alabama.
• Gas Marketing: Earnings rose to $4.5 million, an increase of $2.3 million due to better portfolio optimization.
• Midstream Segment: Earnings of $12.7 million, up nearly $1 million, attributed to additional capacity at Spire Storage.
• Corporate Costs: Adjusted loss of $12.7 million, reflecting higher corporate expenses and interest costs.

2. Strategic Updates and Business Highlights

• Response to Winter Storm Fern: The company highlighted its operational effectiveness during extreme weather, emphasizing the reliability of natural gas.
• Regulatory Developments: New rates in Missouri are effective as of October, with a request for a $30.3 million revenue increase filed in November.
• Acquisition of Piedmont, Tennessee: The transaction is expected to close in Q1 2026, enhancing Spire's regulated growth profile.
• Capital Expenditures: Invested $230 million in Q1, primarily in utility operations, with a projected total CapEx of $800 million to $900 million for 2026.

3. Forward Guidance and Outlook

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

4. Bad News, Challenges, or Points of Concern

• Interest Expense: Increased corporate costs and interest expenses impacted earnings, with an updated adjusted loss range for corporate and other segments.
• Storage Asset Sales: The evaluation process for potential sales has taken longer than expected, although strong interest in the assets has been noted.
• Operational Challenges: Despite strong performance, rising O&M, depreciation, and interest expenses pose ongoing challenges.

5. Notable Q&A Insights

• Gas Market Volatility: Management expressed satisfaction with the utility's hedging strategy during January's gas market volatility, which protected customers.
• Storage Asset Sales: Management confirmed ongoing strong interest in storage assets and aims to announce a sale by the end of the current quarter.
• Integration of Tennessee Acquisition: Emphasis on a methodical integration process post-acquisition, with a focus on maintaining service continuity for customers.
• Future Rate Cases: Anticipated filing for a new Missouri rate case around October-November 2026, following the previous case's timeline.

Overall, Spire Inc. reported strong financial results for Q1 2026, driven by effective operational management and strategic initiatives, while also facing challenges related to rising costs and the timing of asset sales. The company remains optimistic about its growth trajectory and regulatory outcomes.