Northwest Natural Gas: Positive Growth Amid Challenges

Northwest Natural Gas ((NWN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Northwest Natural Gas’s recent earnings call painted a generally positive picture, highlighting substantial customer growth, a long-standing dividend increase, and favorable regulatory outcomes. Despite these positives, the company acknowledged challenges such as higher interest expenses and seasonal earnings losses.

Strong Customer Growth

Northwest Natural Gas reported impressive customer growth, with a combined utility customer growth rate of 10.9% for the 12 months ended September 30. This growth was primarily driven by gas utility acquisitions in Texas. Additionally, Northwest Natural Water posted a 4.1% increase in meter growth, showcasing the company’s expanding footprint.

Dividend Increase

The Board of Northwest Natural Gas approved a dividend increase, marking the 70th consecutive year of annual dividend increases. This achievement places Northwest Natural Holdings among an elite group of only three companies on the New York Stock Exchange with such a record, highlighting its commitment to returning value to shareholders.

Constructive Regulatory Outcomes

The company received a constructive order from the Oregon Public Utility Commission, resulting in a $20.7 million increase in revenue requirements. This regulatory approval, with new rates effective October 31, underscores the company’s ability to navigate regulatory landscapes effectively.

Texas Expansion and Legislation

SiEnergy, a part of Northwest Natural Gas, posted a nearly 35% increase in customer backlog, supported by Texas House Bill 4384. This legislation enables real-time recovery of distribution investments, further strengthening the company’s position in the Texas market.

Renewables and Water Utility Growth

The company’s renewables business continues to deliver steady results, while the water segment showed a 4.1% growth in its customer base, including three small acquisitions. This diversification highlights Northwest Natural Gas’s strategic focus on sustainable growth.

Higher Interest Expenses

The company reported an adjusted net loss increase of $0.14 per share compared to the same period last year, primarily due to higher interest expenses at the holding company. This challenge reflects the broader economic environment and its impact on financial performance.

Seasonal Earnings Loss

A loss of $0.73 per share was reported for the third quarter of 2025, relatively unchanged from the loss of $0.71 per share for the same period in 2024. This consistency is attributed to the seasonal nature of gas utility earnings, which the company continues to manage.

Forward-Looking Guidance

Northwest Natural Holdings provided a positive forward-looking guidance, expecting full-year 2025 results to surpass the midpoint of their adjusted EPS guidance range of $2.75 to $2.95. This optimism is driven by significant investments exceeding $330 million in gas and water systems, supporting a 10.9% utility customer growth rate. The company reaffirmed a long-term earnings growth rate of 4% to 6%, with capital expenditures projected at $450 million to $500 million for 2025. These projections, along with regulatory achievements and a planned $42.4 million revenue increase in Washington, underscore the company’s robust growth strategy.

In summary, Northwest Natural Gas’s earnings call conveyed a positive sentiment, emphasizing strong customer growth, a historic dividend increase, and favorable regulatory outcomes. Despite challenges such as higher interest expenses and seasonal earnings losses, the company’s forward-looking guidance and strategic investments signal a promising future for stakeholders.