Spire Inc. (SR) has delivered better-than-expected results for the fiscal second quarter (ended March 31). The public utility holding company provides natural gas service through its regulated core utility operations.
The company reported net economic earnings (NEE) of $3.42 per share, outpacing analysts’ expectations of $3.11. However, it compares unfavorably with earnings of $3.71 per share reported in the same quarter last quarter.
Further, revenues in the second quarter declined 20.3% year-over-year to $880.9 million but exceeded consensus estimates of $848 million. The fall can primarily be attributed to lower income from Gas Utility segment.
The President and CEO of Spire, Suzanne Sitherwood, said, “We delivered solid results for the second quarter, serving 1.7 million homes and businesses while expanding outreach and support for customers and communities during the critical winter heating season. We did this while continuing to invest in infrastructure upgrades, technology, and new business to bring safe and reliable energy to even more people.”
Guidance
Capital expenditures for fiscal 2022 are now expected to be $540 million, reflecting the deferral of non-operational overhead costs for Spire Missouri into a regulatory asset.
Based on the deferral of overhead costs at Spire Missouri, the company has narrowed its fiscal 2022 NEE forecasts range to $3.75-$3.95 per share.
Wall Street’s Take
Overall, the stock has a Hold consensus rating based on seven unanimous Holds. Spire’s average price target of $75.86 implies 2.3% upside potential from current levels.
Hedge Fund Trading Activity
TipRanks’ Hedge Fund Trading Activity tool shows that confidence of hedge funds in Spire is currently Positive, as the cumulative change in holdings across all three hedge funds that were active in the last quarter was an increase of 10,900 shares.
Takeaway
Though the company surpassed estimates, its performance declined on a year-over-year basis. Further, Spire’s involvement in regulatory matters remains an added concern.
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