Spire Inc. Earnings Call Highlights Growth and Challenges

Spire Inc ((SR)) has held its Q4 earnings call. Read on for the main highlights of the call.

Spire Inc. recently held its earnings call, which conveyed a generally positive sentiment. The company reported strong financial performance, marked by significant EPS growth, key regulatory achievements, and substantial infrastructure investments. Despite these positives, challenges such as higher operating and interest expenses impacted the fourth-quarter performance. However, the future outlook remains optimistic with anticipated growth in earnings and dividends.

Increase in Adjusted EPS

Spire Inc. reported an increase in adjusted EPS for Fiscal 2025, reaching $4.44, up 7.5% from $4.13 in Fiscal 2024. This growth was driven by infrastructure investments across all segments, showcasing the company’s robust financial health and strategic execution.

Significant Infrastructure Investments

The company invested $922 million in Fiscal 2025, with nearly 90% allocated to utilities to enhance the reliability and safety of its systems. This substantial investment underscores Spire’s commitment to maintaining and improving its infrastructure.

Positive Settlement in Missouri Rate Case

A notable achievement for Spire was the positive settlement in Missouri’s rate case, with new rates set to take effect in October. This outcome is expected to bolster the company’s financial position and regulatory environment.

Legislative Milestone in Missouri

Spire achieved a legislative milestone in Missouri with the passage of new legislation establishing a future test year as the rate-setting model. This development is anticipated to provide greater regulatory clarity and stability.

Dividend Increase

The Board of Directors approved a 5.1% increase in the dividend, raising the annualized rate to $3.30 per share. This marks the 23rd consecutive year of dividend growth, reflecting Spire’s strong financial performance and shareholder commitment.

Projected EPS Growth

Looking ahead, Spire provided guidance for Fiscal 2026, projecting adjusted EPS in the range of $5.25 to $5.45, and for Fiscal 2027, EPS is expected to be between $5.65 and $5.85. This growth is anticipated to be driven by infrastructure investments, regulatory outcomes, and strategic acquisitions.

Higher Operating and Interest Expenses

Despite the overall positive performance, Spire faced challenges with higher operating and interest expenses, which affected the fourth-quarter results. These expenses were attributed to higher utility O&M costs and increased interest expenses.

Increased Corporate Costs

Corporate costs rose to $38 million, nearly $8 million higher than the previous year. This increase was due to the absence of a prior-year benefit from an interest rate hedge and higher interest expenses.

Forward-Looking Guidance

Spire’s forward-looking guidance highlights significant financial metrics and strategic goals. The company aims for a long-term adjusted EPS growth target of 5% to 7%, supported by a ten-year capital plan totaling $11.2 billion. The pending acquisition of Piedmont Natural Gas Tennessee is expected to contribute to earnings by fiscal 2027. Spire also plans to maintain financial flexibility with a balanced financing approach, targeting a 15% to 16% FFO to debt ratio.

In summary, Spire Inc.’s earnings call reflected a strong financial performance with positive future projections. The company is poised for growth through strategic investments and regulatory achievements, despite facing some challenges with higher expenses. Investors can look forward to continued dividend growth and robust earnings potential.