Atmos Energy Q3 2026 Earnings Report

Atmos Energy EPS Results

• Actual EPS: $1.43
• Consensus EPS: $1.35
• Beat/Miss: Beat by +$0.08
• One Year Ago EPS: $1.16

Atmos Energy Revenue Results

• Actual Revenue: $879.06 million
• Expected Revenue: $900.82 million
• Beat/Miss: Missed by -$21.76 million
• YoY Revenue Growth: N/A

Atmos Energy Announcement Details

• Quarter: Q3 2026
• Date: 8/5/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 10:00AM ET

Atmos Energy (NYSE:ATO) (NYSE:ATO) is a regulated natural gas distribution and pipeline company headquartered in Dallas, Texas. Through its utility operations, the company delivers natural gas to residential, commercial, industrial and agricultural customers, with services focused on safe and reliable energy delivery.

Atmos Energy serves customers across eight states: Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, Texas and Virginia. Its operations include local natural gas distribution as well as pipeline transportation and storage activities, primarily through its Atmos Pipeline-Texas business.

The company traces its roots to 1906 and has expanded over time through growth and acquisitions in the natural gas industry. Atmos Energy is led by John A. Sells, who serves as president and chief executive officer.

Atmos Energy Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Fiscal 2026 EPS guidance was reaffirmed at $8.40–$8.50, while year-to-date EPS rose 14.5% to $7.33, supported by rate increases, customer growth and higher APT through-system revenues.
• Positive Sentiment: Atmos Energy expects to invest approximately $4.2 billion in fiscal 2026 capital expenditures, with the majority directed toward safety and reliability, while adding nearly 51,000 customers over the past 12 months.
• Positive Sentiment: The company has implemented $396 million of annualized operating-income increases since the start of the fiscal year and has seven additional filings in progress seeking nearly $334 million, most of which is expected to take effect in fiscal 2027.
• Negative Sentiment: APT’s gas-price spreads narrowed significantly beginning in late June as new takeaway capacity came online sooner than expected; management now expects the lower end of its previously discussed $0.08–$0.12 second-half EPS contribution.
• Negative Sentiment: Fiscal 2026 operating and maintenance expense, excluding bad debt, is now expected to be $875 million–$885 million, reflecting higher activity related to growth, line locates, compliance and maintenance.

Presentation

[Operator]

I'll now hand the conference over to Dan Meziere, Vice President of Investor Relations and Treasurer. Dan, please go ahead.

[Dan Meziere, VP of Investor Relations and Treasurer at Atmos Energy]

Thank you, Lucas. Good morning, everyone, and thank you for joining our fiscal 2026 third quarter earnings call. With me today are Kevin Akers, President and Chief Executive Officer, and Chris Forsythe, Senior Vice President and Chief Financial Officer. Our earnings release and conference call slide presentation, which we will reference in our prepared remarks, are available at atmosenergy.com under the Investor Relations tab. As we review these financial results and discuss future expectations, please keep in mind that some of our discussion might contain forward-looking statements within the meaning of the Securities Act and the Securities Exchange Act. Our forward-looking statements and projections could differ materially from actual results. The factors that could cause such material differences are outlined on slide 32 and are more fully described in our SEC filings. With that, I will turn the call over to Kevin.

[Kevin Akers, President and CEO at Atmos Energy]

Thank you, Dan. Good morning, everyone. We appreciate your interest in Atmos Energy. Yesterday, we reported year-to-date fiscal 2026 net income of $1.2 billion or $7.33 per diluted share, and we reaffirmed our earnings per share guidance in the range of $8.40-$8.50. Our capital expenditures for this fiscal year total $3.1 billion, with over 87% of these investments focused on enhancing the safety and reliability of our distribution, transmission, and underground storage systems. Across our service territories, we continue to see steady, diversified customer growth. For the 12 months ending June 30, 2026, we added nearly 51,000 new customers, with nearly 39,000 of those new customers located here in Texas. During the third quarter, we added 600 commercial customers and over 2,500 curb commercial customers fiscal year to date.

[Kevin Akers, President and CEO at Atmos Energy]

Additionally, we added five new industrial customers during the third quarter and 12 new industrial customers fiscal year to date. The 12 new industrial customers are anticipated to use approximately 950,000 Mcf per year once they are fully operational. That is volumetrically equivalent to adding 18,000 residential customers. This continued demand from all customer classes demonstrates the value and vital role natural gas plays in economic development across our Atmos Energy service territories. The Texas Workforce Commission reported that Texas once again added jobs at a faster rate than the nation over the last 12 months ending June 2026. In 2026, Texas added three Fortune 500 companies, bringing the total number of Fortune 500 companies to 57, the most in the nation and highest level in Texas since 2010.

[Kevin Akers, President and CEO at Atmos Energy]

In APT, we continue to work to enhance the safety, reliability, versatility, and supply diversification of our system, as well as support the continued growth we are seeing in the local distribution companies behind APT's system. APT is currently working on two separate projects to the southeast of the DFW Metroplex that will install a total of 29 mi of 36-in pipeline to connect two adjacent compressor stations to our Tri-City storage facility. These projects enhance system reliability and capacity for gas transported from the Haynesville and Cotton Valley shale plays to our Bethel and Tri-City storage facilities, all to support the growing DFW Metroplex. To the east of the Metroplex, we began construction of a bilateral compressor station in Carthage, Texas, that will increase the capacity of our 36-in Line S-2 pipeline.

[Kevin Akers, President and CEO at Atmos Energy]

Finally, we are working on the final phase of the WA Loop Project to support growth in the northwestern portion of the Metroplex. This final phase will install 15 mi of 36-in pipe, it will complete a 92-mi, 36-in pipeline loop. All of these projects are currently scheduled to be placed into service by the end of the calendar year. This month, APT will submit its annual Rider REV tariff, seeking to reflect $160 million-$165 million in revenue credits for LDC customers on the system between November 1st, 2026, and October 31st, 2027. If this amount is approved as filed, these customers will have received over $300 million in savings through the Rider REV mechanism from November 2023 through October 2027.

[Kevin Akers, President and CEO at Atmos Energy]

Our customer support associates and service technicians continue to provide exceptional customer service, achieving customer satisfaction ratings in excess of 97% for the first nine months of this fiscal year. During the first nine months of the fiscal year, our customer advocacy team helped nearly 49,000 customers receive about $16.2 million in funding assistance. I'll now turn the call over to Chris for his update.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

Thank you, Kevin, thank you to everyone for joining us this morning. As Kevin mentioned, earnings per share for the first nine months of the fiscal year was $7.33, which represents a 14.5% increase over the prior year period. Our year-to-date results include $132 million or $0.63 on the impact of House Bill 4384, $71 million was recognized in our distribution segment, the remaining $61 million was recognized at APT.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

In addition to the impact of House Bill 4384, I wanted to highlight a few other drivers of our financial performance for the fiscal year-to-date period. Rate increases in both of our operating segments totaled $227 million. Operating income increased by an additional $41 million due to residential and commercial customer growth and increased customer load. APT's through system revenues, net of Rider REV, increased about $34 million or $0.16. This increase continues to reflect the significantly higher spreads realized during fiscal 2026 compared to fiscal 2025 that we've been discussing this entire fiscal year. During the first nine months of fiscal 2026, the spreads we captured averaged $4.66 compared with $1.77 in the prior period, reflecting rising associated gas production, constrained takeaway capacity, and lower demand due to unseasonably warm weather during the past winter heating season.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

Consolidated O&M decreased $14 million, reflecting higher employee compliance and safety-related spending in our distribution segment, higher maintenance spending at APT, all offset by the impact of the implementation of the House Bill 4384 deferrals. From a regulatory perspective, since the beginning of the fiscal year, we have implemented $396 million in annualized operating income increases. Of this amount, $260 million was implemented during our third and fourth fiscal quarters. Currently, we have seven filings in progress, seeking nearly $334 million in annualized operating income increases. We expect to implement most of this amount in the first quarter of fiscal 2027. Our equity capitalization as of June 30th was 60%, and we do not have any short-term debt outstanding. At quarter end, we had $4.6 billion in available liquidity to support our operations.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

This includes approximately $937 million in net proceeds available under existing forward sale agreements, which is expected to satisfy the remainder of our anticipated fiscal 2026 equity needs and a significant portion of our anticipated equity needs for fiscal 2027. As we reported last night, we reaffirmed our fiscal 2026 earnings per share guidance in the range of $8.40-$8.50. APT's through system business during the third fiscal quarter was in line with our expectations. Beginning in June, spreads have narrowed significantly now that additional takeaway capacity has come online, some sooner than expected. Additionally, O&M spending in fiscal 2026 is trending slightly higher. We now expect fiscal 2026 O&M, excluding bad debt expense, to be in the range of $875 million-$885 million. We remain on track to spend approximately $4.2 billion in capital expenditures for fiscal 2026.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

We appreciate your time this morning and your interest in Atmos Energy. We'll now open up the call for questions.

[Operator]

We will now begin the question and answer session. If you would like to ask a question, press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Constantine Lednev with Wells Fargo Securities. Constantine, please go ahead.

[Whitney Mutalemwa, Analyst at Wells Fargo Securities]

Good morning. This is Whitney Mutalemwa here for Constantine. Thanks for taking the question.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

Good morning.

[Whitney Mutalemwa, Analyst at Wells Fargo Securities]

Great quarter. Given we are a quarter short of the year, do you anticipate to be in the top end of guidance? Do you anticipate any offsets to the strong year-to-date performance in 4Q? Maybe just a quick question around APT. Given where Waha has been trading, are contributions still moving in the same direction, or do you anticipate some narrowing?

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

Well, good morning again. As we mentioned, we've reaffirmed our guidance in the range of $8.40-$8.50. As I mentioned, APT's performance in the third quarter was in line with our expectations. As I also highlighted, we are seeing significantly narrower spreads beginning in the latter half of the third quarter and continuing through today as a result of additional takeaway capacity coming online, some of which was coming online sooner than expected. A couple of different pipes were expected to go online in the fourth quarter of the calendar year, and they came on, one in late June and one here in late July. They're beginning to ramp up, which has had a causing a compression of the spread. All in all, we are standing by our $8.40-$8.50 range for EPS for fiscal 2026.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

We will see where the fourth quarter takes us in terms of spread opportunities and other operational factors for the remainder of the fiscal year.

[Whitney Mutalemwa, Analyst at Wells Fargo Securities]

Got it. Okay. Just to squeeze a tiny question. Given the strength in fiscal year 2026, do you feel you can carry some flex into fiscal year 2027 just from an O&M and cost perspective? That will be all. Thank you.

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

If I understand your question correctly, if you're talking about APT, we certainly had mentioned before that we will continue to reflect in our base plan that we will roll forward in the fall an amount coming from APT's through system business in line with the benchmark that we have established at roughly $107 million. With respect to O&M, in our five-year guidance that we have out there right now, we anticipated 4% O&M increase per year, we'll refresh that when we roll forward the five-year plan later this fall.

[Whitney Mutalemwa, Analyst at Wells Fargo Securities]

Sounds good. Thank you.

[Operator]

Your next question comes from the line of Richard Sunderland with Truist Securities. Richard, please go ahead.

[Richard Sunderland, Analyst at Truist Securities]

Hey, good morning, thanks for the time today. I actually want to follow up on some of those APT questions. Just last quarter, I think it was an $0.08-$0.12 range for 2H uptick you guys had spoken to. Looks like you captured most of that this quarter, but is $0.08-$0.12 still the right range to be thinking about over that period, meaning for the balance of the year on 4Q?

[Chris Forsythe, Senior VP and CFO at Atmos Energy]

Rich, thanks for the question this morning. As you mentioned, we did pick up the $0.08 in the third quarter. With the tightening of the spreads, I would say we're probably going to be in the lower end of that range at this point in that $0.08-$0.12. We'll see. Again, we'll have to continue to see what happens with maintenance on some of this takeaway capacity, where the summer heat load is going or winter or cooling load, excuse me. We'll just see where we go from that. I think the lower of that range is more appropriate.

[Richard Sunderland, Analyst at Truist Securities]

Okay. That's helpful context. I also wanted to follow up on O&M, and I think ask, sort of in a similar way, right? You took up the low end of the range, $10 million. I realize it's relatively modest, is that reflective of any activities kind of getting pulled forward into 2026 from 2027? Or is that more around line locates, other kind of external drivers? Just curious to parse that a little bit and think about kind of 2026 versus 2027 O&M activity.

[Kevin Akers, President and CEO at Atmos Energy]

As typical at this time of year, it's more related to ongoing activity across the metroplex and other areas with the growth that we're seeing, line locate activity, ongoing compliance, and maintenance activities in that area. That's what we normally see around this time of the year.

[Richard Sunderland, Analyst at Truist Securities]

Great. I'll leave it there. Thank you.

[Kevin Akers, President and CEO at Atmos Energy]

Thank you.

[Operator]

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies. Julien, please go ahead.

[Luke Fenker, Analyst at Jefferies]

Hey, guys. Luke Fenker on for Julien. Nicely done on the quarter. I just wanted to ask on rule 7.7102, just given the benefits we've seen of late, can we expect this to maybe remain a discrete earnings benefit in 2027, or does it increasingly roll into Texas recovery from here? Just want to get a sense of how that's trending.

[Kevin Akers, President and CEO at Atmos Energy]

Thanks for the question, Luke. Good morning. Fiscal 2026 is a step-year change as a result of the implementation of 7.7102. As we've said, going forward, we expect that year-over-year to be more in line with what we've experienced in the past with respect to rule 8.209. As we said at the end of the second quarter, we are anticipating launching a 6%-8% earnings per share growth off of our current range or guidance range of $8.40-$8.50. That reflects that it's more of a moderation effect going forward, now that we've got a full year's impact of the rule under our belt at this point.

[Luke Fenker, Analyst at Jefferies]

Awesome. Thank you. Maybe just wanted to see the latest timing and your confidence level around the Mid-Tex Cities RRM, and maybe how you see yourself positioned on customer bill affordability in Texas more broadly.

[Kevin Akers, President and CEO at Atmos Energy]

Yeah. If you look in our deck that's out there, particularly our May investor deck, I think it's slides 18 through 21 or 22. We have good information out there about affordability, both from a customer bill perspective, where we remain the lowest bill in the house. If you want to look at it on an energy comparison basis, kilowatt to kilowatt, BTU to BTU. Across our service territories, we range from 2%-4% lower than electricity on a household basis. You're going to look at wallet share, both from a low income and a median income perspective. We range from 1%-1.2% of the wallet with on the electric side ranging at about two to almost three times wallet share.

[Kevin Akers, President and CEO at Atmos Energy]

We think our team continues to do an excellent job of keeping affordability top of mind, focusing on things we can control and being an efficient provider.

[Luke Fenker, Analyst at Jefferies]

Awesome. I'll leave it there. Thanks, guys. All the best.

[Kevin Akers, President and CEO at Atmos Energy]

Thank you.

[Operator]

A reminder that if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Dylan Lipner with Mizuho. Dylan, please go ahead.

[Dylan Lipner, Analyst at Mizuho]

Everybody, congrats on a good quarter here. I just kind of wanted to get back to Waha, with Waha now back in positive territory and additional takeaway capacity expected to come online over the next several quarters. How are you guys thinking about how this is going to impact APT's earning power and utilization in the near term?

[Kevin Akers, President and CEO at Atmos Energy]

Well, as we said, Chris just highlighted where we think we're going to be on the guidance he gave before at the lower end of the $0.08-$0.12 range. Again, we budget the benchmark for Rider REV, and we'll continue to monitor what we see over the next few months as we head into the fall and the heating season. Definitely no crystal balls here. We're not going to try and guess what's going to be going on in that period. We'll just have to see what the rest of the summer cooling load looks like. Then as we move into the fall, does winter and fall show up early and cause a spike in demand? What does that look like? Again, pretty much back to basics as we do every year in and year out.

[Kevin Akers, President and CEO at Atmos Energy]

We're going to budget the benchmark, we'll see what comes our way from there.

[Dylan Lipner, Analyst at Mizuho]

Got you. I appreciate the color. That's all I got.

[Kevin Akers, President and CEO at Atmos Energy]

Thank you.

[Operator]

One last reminder that if you would like to ask a question, please press star one to raise your hand. There are no further questions at this time. I will now turn the call back to Dan Meziere for closing remarks. Dan, please go ahead.

[Dan Meziere, VP of Investor Relations and Treasurer at Atmos Energy]

We appreciate your interest in Atmos Energy, and thank you again for joining us this morning. A recording of this call is available for replay on our website through September 30th, 2026. Have a good day.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Dan Meziere, VP of Investor Relations and Treasurer
• Kevin Akers, President and CEO
• Chris Forsythe, Senior VP and CFO

Analysts

• Whitney Mutalemwa, Analyst at Wells Fargo Securities
• Richard Sunderland, Analyst at Truist Securities
• Luke Fenker, Analyst at Jefferies
• Dylan Lipner, Analyst at Mizuho