Spire Q3 Earnings Call Highlights

Key Points

• Spire is now fully regulated after completing the divestitures of Spire Marketing and Spire Storage, reducing earnings volatility; the Spire Mississippi sale remains expected in fiscal Q1 2027.
• Fiscal Q3 adjusted loss improved to $0.26 per share from $0.29 a year earlier, helped by stronger utility results and the absence of preferred-dividend expense. Spire reaffirmed fiscal 2026 EPS guidance of $3.90–$4.10 and fiscal 2027 guidance of $5.40–$5.60.
• Spire continues to pursue substantial investment and regulatory growth, including an $11.2 billion 10-year capital plan, Alabama rate-mechanism renewals, Missouri infrastructure cost recovery and a Tennessee revenue-increase request.

Spire NYSE: SR reported a fiscal third-quarter adjusted loss from continuing operations of $15 million, or $0.26 per share, compared with an adjusted loss of $13 million, or $0.29 per share, a year earlier, as the utility completed divestitures that shifted its business profile to fully regulated operations.

President and Chief Executive Officer Scott Doyle said the company has completed the sale of its Spire Marketing and Spire Storage businesses, while continuing to integrate Spire Tennessee following its acquisition. The company still expects to complete the sale of Spire Mississippi in the first quarter of fiscal 2027.

“With the completion of the marketing and storage divestitures, we're now operating as a fully regulated company,” Doyle said. He said the portfolio changes reduce earnings volatility and improve the predictability of the company’s results, which are now supported by rate-base growth, regulatory mechanisms and its regulated utility and pipeline operations.

Quarterly Results and Guidance

The adjusted per-share loss improved year over year in part because fiscal 2025 results included $0.06 per share of preferred dividend expense. That expense did not recur after the company redeemed its preferred shares.

Spire’s Gas Utility segment posted an adjusted loss of $3 million, improving from a $10 million loss in the prior-year quarter. Chief Financial Officer Adam Woodard said new rates in Missouri and Alabama contributed to the improvement, including Missouri ISRS rates implemented during the spring and Alabama’s CCM mechanism.

Higher customer usage, net of weather mitigation, in Alabama was partly offset by lower usage, net of weather mitigation, in Missouri. Operations and maintenance expense increased about $4 million, primarily due to higher bad-debt expense, although Woodard said utility run-rate O&M remains below inflation.

The company’s other activities recorded an adjusted loss of $12 million, compared with a $3 million loss in the prior-year period, reflecting higher corporate costs and interest expense. Spire also reported $253.8 million in earnings from discontinued operations, including a $254.6 million after-tax gain on the sales of businesses.

Spire reaffirmed its fiscal 2026 adjusted EPS guidance from continuing operations of $3.90 to $4.10. The guidance excludes a full year of Spire Storage, Spire Marketing and Spire Tennessee, but includes Spire Mississippi. The company also reaffirmed fiscal 2027 adjusted EPS guidance of $5.40 to $5.60 and its long-term adjusted EPS growth target of 5% to 7%.

Woodard said the long-term growth target uses the original fiscal 2027 guidance midpoint of $5.75 as its base. During the question-and-answer session, Doyle said fiscal 2028 is expected to be a “step-up year,” driven by recovery of regulatory lag in Missouri and the use of a future test-year mechanism. He said the company expects more linear growth after 2028, with Tennessee and Alabama already relatively linear and Missouri expected to become more so.

Capital Plan and Financing

For the first nine months of fiscal 2026, Spire invested nearly $600 million in capital expenditures, primarily for system upgrades, infrastructure modernization and new customer connections. The company continues to expect about $800 million in full-year capital expenditures across its utilities.

The company’s 10-year capital plan totals $11.2 billion. Woodard said it supports estimated rate-base growth of 7% in Missouri and 7.5% in Tennessee, along with 6% regulated equity growth in Alabama and Spire Gulf Coast.

Spire expects to substantially fund its capital program using operating-company debt and cash from operations, with limited annual equity issuance. It also has a $375 million interest-rate hedge portfolio intended to reduce exposure to higher borrowing costs.

The company is targeting funds from operations-to-debt of 14% to 15% by the end of 2028. Woodard said its current FFO-to-debt ratio was 13% after incorporating trailing 12-month funds from operations that include Spire Tennessee.

Regulatory Proceedings

In Alabama, hearings on renewals of the rate stabilization and equalization mechanism were scheduled for Aug. 6 for Spire Alabama and Aug. 7 for Spire Gulf. Spire has requested an adjusting-point return on equity of 10.5% for Spire Alabama and 10.75% for Spire Gulf.

Doyle said the proceedings represent a more formal and public version of a renewal process that has historically been negotiated every three to four years. He said the company expects a commission decision later in September. Woodard said the remaining hearing issues include the ROE range, the term of the mechanism, the cost-control mechanism and the customer charge.

Addressing lower ROE recommendations from some interveners, Doyle said Spire believes its requested returns are within the regional average referenced during Alabama’s recent legislative session.

In Missouri, Spire reached a settlement with commission staff and the Office of Public Counsel in an accounting authority order proceeding. The settlement does not quantify or provide recovery for lost margin associated with lower weather-related usage during the past year, according to Doyle. Instead, it creates a process to collaborate on improvements to the weather normalization adjustment rider or a potential alternative in the company’s next rate case.

Spire also filed in May to recover about $21 million of interest revenues tied to continued infrastructure investments in Missouri, with new rates expected to take effect in November. The company expects to file its first Missouri future test-year rate case in early November 2026.

In Tennessee, Spire filed its first annual review mechanism on May 20, requesting a $14 million revenue increase. The filing reflects a 9.8% authorized ROE, a capital structure of 49% equity and 51% debt, and a $1.5 billion rate base as of Dec. 31, 2025. New rates are expected to become effective Oct. 1, 2026.

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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