Atmos Energy ((ATO)) has held its Q3 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Atmos Energy’s recent earnings call painted a largely positive picture, underscoring robust financial performance, significant customer growth, and favorable impacts from new legislative measures. Despite facing some challenges with increased operating expenses and bad debt expense, the overall sentiment was optimistic, with the positives outweighing the negatives.
Strong Financial Performance
Atmos Energy reported a year-to-date fiscal 2025 net income of $1 billion, translating to $6.40 per diluted share. The company also updated its earnings per share (EPS) guidance to a range of $7.35 to $7.45, reflecting its strong financial footing.
Customer Growth
The company experienced substantial customer growth, adding nearly 58,000 new residential customers in the 12 months ending June 30, 2025, with a significant portion, 45,000, in Texas. Additionally, Atmos Energy connected 2,500 new commercial customers year-to-date.
Industrial Demand
Atmos Energy expanded its industrial customer base by adding 22 new industrial customers, which is expected to bring an annual load of approximately 3.4 Bcf, equivalent to 67,000 residential customers.
Data Center Contract
APT, a subsidiary of Atmos Energy, entered into a significant contract to supply 30 Bcf annually to a data center in the Abilene area. Notably, 75% of the revenue from this contract will benefit LDC customers.
Customer Satisfaction
Customer satisfaction remains high, with a 97% satisfaction rating for customer support associates and service technicians, showcasing Atmos Energy’s commitment to service excellence.
Recognition as Trusted Brand
Atmos Energy was named the 2025 Most Trusted Brand among 148 U.S. utility companies by Eskent, securing the top spot in the South region, which underscores its strong reputation.
Texas Legislation Impact
New Texas legislation now allows 80% of capital spending to qualify for deferral treatment, up from 45%, which is expected to enhance future earnings and provide financial flexibility.
Increased Operating Expenses
The company reported a $85 million increase in consolidated operating and maintenance expenses, attributed to higher employee-related costs, increased line locate pipeline inspection, and higher bad debt expense.
Bad Debt Expense
A $14 million nonrecurring reduction in bad debt expense was recognized in fiscal 2024, impacting year-over-year comparisons.
Forward-Looking Guidance
Looking ahead, Atmos Energy updated its EPS guidance to a range of $7.35 to $7.45, influenced by new Texas legislation expected to boost fourth-quarter EPS by approximately $0.10. The company anticipates a 6% to 8% annual growth in EPS and plans to provide a comprehensive update to its fiscal 2026 guidance and a five-year plan during the fourth-quarter earnings call in November.
In conclusion, Atmos Energy’s earnings call highlighted a strong financial performance and strategic growth initiatives, supported by favorable legislative changes. Despite some operational challenges, the company’s outlook remains positive, with expectations of continued growth and enhanced earnings potential.