Spire Q1 Earnings Call Highlights

Key Points

• Spire reported adjusted Q1 earnings of $108 million, or $1.77 per share (up from $81 million, $1.34), driven by new utility rates across its footprint and contributions from marketing and midstream; management also noted utilities delivered the equivalent of 31 gigawatts of electric generation during Winter Storm Fern.
• Management reaffirmed fiscal 2026 adjusted EPS guidance of $5.25–$5.45 and fiscal 2027 guidance of $5.65–$5.85, while the company is evaluating a potential sale of its natural gas storage assets and awaiting Tennessee acquisition regulatory approval, with an 18‑month transition services agreement in place.
• Spire expects $809 million of capex in 2026 within a 10‑year, $11.2 billion capital plan and has financed the Tennessee deal with debt (including $900 million of junior subordinated notes); a preferred redemption raises long‑term debt issuance by about $250 million but management says net EPS is unchanged.

Spire NYSE: SR reported higher first-quarter fiscal 2026 results and reiterated its multi-year earnings outlook as management highlighted new rates across its utility footprint, continued progress on a pending Tennessee acquisition, and an ongoing review of potential natural gas storage asset sales.

First-quarter results driven by utility rate updates

Spire posted adjusted earnings of $108 million, or $1.77 per share, for the fiscal first quarter, up from $81 million, or $1.34 per share, in the prior-year period. CEO Scott Doyle said the year-over-year improvement reflected “solid execution” in the gas utility business supported by new rates across all utilities, alongside contributions from the company’s marketing and midstream segments.

During the call, Doyle also recognized employee performance during Winter Storm Fern, noting the event produced some of the highest natural gas demand in U.S. history, according to the American Gas Association. He said that at the height of the storm, Spire’s utilities delivered natural gas equivalent to 31 gigawatts of electric generation capacity, which he described as coming at “a much lower cost to customers.”

Segment performance: Utilities up, marketing and midstream contribute

CFO Adam Woodard detailed segment-level performance for the quarter:

• Gas utilities earned $104 million, up about $26 million from the prior year. Woodard attributed the increase primarily to new rates in Missouri and higher margin under the Rate Stabilization and Equalization (RSE) mechanism in Alabama.
• Utility gains were partially offset by lower volumetric margin in Missouri and Alabama, and by higher operations and maintenance (O&M), depreciation, and interest expense.
• Gas marketing earned $4.5 million, up $2.3 million, which Woodard said was driven by increased portfolio optimization opportunities.
• Midstream delivered $12.7 million, up nearly $1 million, driven by additional capacity at Spire Storage, partially offset by higher depreciation and interest expense.
• Other corporate costs were an adjusted loss of $12.7 million, about $2 million higher than the prior year, reflecting higher corporate costs and slightly higher interest expense.

In response to analyst questions on gas market volatility in January, Doyle said it was “a little early” to quantify impacts, but said the company met all customer obligations and that market liquidity held up during the event. He also said Spire was satisfied with how its utility purchasing and hedging strategy performed, noting the company has the ability to operate its own asset management arrangements in Missouri and Alabama, which he said “performed as expected” and helped protect customers from volatility.

Guidance reaffirmed; storage review and Tennessee acquisition remain key swing items

Management reaffirmed fiscal 2026 adjusted EPS guidance of $5.25 to $5.45 and fiscal 2027 adjusted EPS guidance of $5.65 to $5.85, along with a long-term 5% to 7% adjusted EPS growth target.

Woodard reiterated that the 2026 guidance excludes results from the pending acquisition of the Piedmont Tennessee business and includes a full year of earnings from the company’s natural gas storage facilities. The 2027 guidance, he said, reflects a full year of expected earnings contribution from the Piedmont Tennessee business and excludes earnings from Spire Storage.

Spire is continuing its evaluation of a potential sale of its natural gas storage assets. Doyle said the timeline has extended beyond initial expectations as the company focuses on achieving the “right value” for each asset. On the Q&A portion of the call, Doyle said Spire has seen “very good interest” and that the assets could be evaluated together or separately. Woodard said the company expects to make an announcement on the storage evaluation “a little bit later this quarter” and indicated the company is “fully covered” with a bridge loan if the storage transaction is not completed before the Tennessee acquisition closes.

On the Tennessee acquisition, management said the Hart-Scott-Rodino review is complete, with approval still pending at the Tennessee Public Utility Commission. Doyle said integration planning is underway and supported by an 18-month transition services agreement intended to ensure continuity for customers and employees.

Capital plan and financing: preferred redemption impacts presentation, not EPS

Spire reported $230 million of first-quarter capital expenditures, with most directed to its gas utility operations for system upgrades, modernization, and new business connections. Doyle said capital spending was lower year over year due to the near completion of Advanced Meter Upgrades in the St. Louis region and the wrap-up of a storage expansion project. The company maintained its expectation for 2026 capital expenditures of $809 million and reiterated its 10-year, $11.2 billion capital plan, primarily targeted to utility investments.

On financing for the Tennessee transaction, Doyle said Spire issued $900 million of junior subordinated notes in November and entered into a master note purchase agreement in December for $825 million of Spire Tennessee senior notes to fund at closing. He said the company continues to expect minimal common equity needs and told an analyst that any equity market activity, if needed, would likely be “sometime after the next call in May or June.”

Separately, Woodard outlined base business financing plans excluding Tennessee, including expected equity needs of $0 to $50 million per year and continued reliance on long-term debt. He cited recent issuances of $200 million of first mortgage bonds at Spire Missouri in October 2025 and $200 million of 6 3/8% junior subordinated notes in January 2026. Proceeds from the junior subordinated notes, along with other funds, are intended to redeem all outstanding shares of Spire Inc.’s preferred stock.

Woodard said projected long-term debt issuances for 2026 increased by $250 million due to the preferred redemption decision. He also said the adjusted earnings range for corporate and other was updated to -$40 million to -$46 million, lowering the midpoint by $9 million to reflect interest expense associated with incremental debt used to redeem the preferred stock, while preferred dividends impacting EPS are expected to be lower by $9 million. In the Q&A, management confirmed that these items offset, leaving net EPS unchanged.

Regulatory calendar and operational priorities

Doyle said new Missouri rates became effective in October, and Spire filed in November for a $30.3 million revenue increase under the Infrastructure System Replacement Surcharge, with rates expected to be effective no later than May. Spire Alabama and Spire Gulf rates under the RSE mechanism were updated in December.

Looking ahead in Missouri, Doyle told analysts the company anticipates filing its next rate case after fiscal year-end but before Thanksgiving, in the October-November timeframe. He described it as a “case of first impression” as Spire prepares to file its first future test year case and said work is underway with commission staff and other stakeholders.

Woodard also noted that the merger of the STL and MoGas pipelines was completed on January 1, 2026, and the combined system will operate as the Spire MoGas pipeline.

In closing remarks, Doyle said the company’s priorities for the year remain consistent: safe and reliable service, efficient execution of its capital plan, timely recovery of capital, disciplined cost management to support customer affordability, constructive regulatory outcomes, and successfully financing, closing, and integrating the Tennessee acquisition.

About Spire NYSE: SR

Spire Inc NYSE: SR, formerly known as The Laclede Group, is a regulated natural gas distribution company headquartered in St. Louis, Missouri. Through its three operating divisions—Spire Missouri, Spire Alabama and Spire Mississippi—the company delivers natural gas to more than 1.7 million residential, commercial and industrial customers. Spire's service territory spans key markets in the central and southern United States, including metropolitan St. Louis, central Alabama and central Mississippi.

Founded in 1857 as the Laclede Gas Light Company, the business has grown through strategic acquisitions, notably Alabama Gas Corporation in 2013 and Mississippi Gas in 2016.

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