Atmos Energy (ATO) 8 Aug 24 2024 Q3 Earnings call transcript

Atmos Energy Corporation recently held its fiscal 2024 third quarter earnings conference call, shedding light on the company's performance and future expectations. The call, led by Vice President of Investor Relations and Treasurer, Daniel Meziere, featured key updates from President and CEO, Kevin Akers, and Senior Vice President and CFO, Christopher Forsythe. The call provided valuable insights into the company's financial health, regulatory outcomes, customer growth, and future outlook.

Financial Performance and Drivers

Atmos Energy reported a year-to-date diluted earnings per share of $6, up from $5.33 in the previous year, reflecting the company's strong financial position. The earnings were primarily driven by two themes: regulatory outcomes and customer growth. Regulatory outcomes, particularly in the Pipeline and Storage segment, increased operating income by $238 million, while residential customer growth and rising industrial load contributed an additional $18 million.

Regulatory Outcomes and Customer Growth

The call highlighted the significance of regulatory outcomes in driving the company's performance. The company's focus on safety and reliability, as well as customer growth, has been instrumental in its success. The Pipeline and Storage segment, in particular, saw a $19 million increase in revenues, with a majority of this growth realized during the third fiscal quarter. The company's investments in improving the safety and reliability of its system, coupled with customer growth, have positioned Atmos Energy well for future growth.

Future Outlook and Challenges

Looking ahead, Atmos Energy expects its fiscal 2024 earnings per share to be at the higher end of its reaffirmed guidance range of $6.70 to $6.80. The company anticipates continued spending on compliance, maintenance, and monitoring to ensure system reliability. However, challenges remain, particularly in managing the elevated spreads between the Waha header on the western end of APT system and delivery points in the eastern and southern ends of the system. These spreads are expected to remain elevated through the end of the fiscal year, potentially impacting the company's fourth quarter results.

Investor Interactions and Analyst Questions

During the call, key shareholders and investors raised questions about the company's financing needs for fiscal 2025, O&M execution, and the impact of APT spread dynamics on the company's performance. The company provided reassurances on its financial position, with a strong equity capitalization and manageable debt profile. The company also addressed concerns about O&M execution and the impact of APT spread dynamics, offering insights into its strategies for managing these challenges.

Conclusion

Atmos Energy Corporation's fiscal 2024 third quarter earnings call painted a picture of a company that is well-positioned for future growth. The company's focus on safety, reliability, and customer growth, coupled with its ability to navigate regulatory outcomes and manage challenges, is a testament to its resilience and adaptability. As the company moves into the fourth quarter and beyond, it will continue to face challenges, but its strong financial position and strategic focus on safety and reliability give it a solid foundation for success.