Atmos Energy's Q3 Earnings Call: Robust Growth and Strong Financial Performance Despite Challenges

Atmos Energy reported a year-to-date net income of $1 billion, updated EPS guidance to $7.35-$7.45, and added nearly 58,000 new residential customers. The company also expanded its industrial customer base and entered into a significant data center contract. Customer satisfaction remains high, and Atmos Energy was named the 2025 Most Trusted Brand among US utility companies. New Texas legislation is expected to enhance future earnings and provide financial flexibility.

Atmos Energy Corporation (ATO) reported its third-quarter earnings for fiscal year 2025, meeting analysts’ expectations with an earnings per share (EPS) of $1.16. The company also surpassed revenue forecasts, reporting $838.77 million against the expected $821.21 million. Following the earnings release, Atmos Energy’s stock surged by 5.04%, closing at $157.02 [1].

The company’s year-to-date net income reached $1 billion, with diluted earnings per share increasing to $6.40 from $6.00 in the prior year. This growth reflects strong operational execution and strategic investments in infrastructure, particularly in Texas, where industrial demand for natural gas remains robust [1].

Significant capital spending focused on safety and reliability, totaling $2.6 billion, a 22% increase. Atmos Energy added nearly 58,000 new residential customers, with almost 45,000 of those new customers located in Texas. Commercial customer growth remained solid, with approximately 575 new customers connecting to the system during the second quarter and over 2,500 new customers connecting to the system fiscal year to date [1].

The company expanded its industrial customer base by adding three new industrial customers during the third quarter, with 22 new industrial customers added in the fiscal year to date. This growth is expected to add approximately 3.4 billion cubic feet (Bcf) of gas annually once fully operational [1].

Atmos Energy also entered into a significant data center contract, with ADT agreeing to transport natural gas to a customer that will generate on-site power to serve a data center in the Abilene area. The data center is expected to be fully operational by the end of the calendar year and will require approximately 30 Bcf of gas annually [1].

The company revised its fiscal 2025 EPS guidance upward to a range of $7.35 to $7.45, from the previous $7.20 to $7.30. Atmos Energy anticipates a 6-8% annual growth in earnings per share and plans to provide a comprehensive five-year plan update in November. The company has $5.5 billion in liquidity and is focused on infrastructure expansion [1].

Customer satisfaction remains high, with the company’s customer support associates and service technicians receiving a 97% satisfaction rating from customers. Atmos Energy was named the 2025 Most Trusted Brand among US utility companies by Eskom [1].

New Texas legislation, House Bill 4384, is expected to enhance future earnings and provide financial flexibility. The legislation authorizes a gas utility to defer for future recovery as a regulatory asset post in service carrying costs, depreciation, and ad valorem taxes associated with the unrecovered gas gross plant for noneligible 2009 capital investments such as new customer growth and system expansion [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-atmos-energy-q3-2025-earnings-meet-forecasts-stock-surges-5-93CH-4178015