Atmos Energy Q2 2025 slides: EPS growth accelerates, guidance raised

Atmos Energy Corporation (NYSE:ATO) presented its fiscal second quarter 2025 results on May 8, 2025, highlighting strong financial performance, increased capital spending, and an improved outlook for the full year. The company continues to focus on safety and reliability investments while maintaining its 41-year track record of consecutive dividend increases.

Quarterly Performance Highlights

Atmos Energy reported diluted earnings per share (EPS) of $3.03 for the three months ended March 31, 2025, representing a 6.3% increase from $2.85 in the same period last year. For the six-month period, diluted EPS reached $5.26, up 6.7% from $4.93 in the prior year.

Net income for the quarter rose to $486 million, compared to $432 million in Q2 fiscal 2024, with both the Distribution and Pipeline & Storage segments showing solid growth. The Distribution segment contributed $381 million (up from $343 million), while Pipeline & Storage added $105 million (up from $89 million).

As shown in the following consolidated financial highlights table, Atmos Energy has maintained consistent growth across key metrics:

Operating income for the quarter increased by $77.9 million to $628.9 million, driven primarily by rate adjustments, decreased EDIT refunds, and customer growth. The Distribution segment saw an operating income increase of $57.5 million, while Pipeline & Storage added $20.4 million.

The company’s operating income growth was supported by several key drivers, as detailed in this breakdown:

Capital Allocation & Strategic Initiatives

Atmos Energy has significantly increased its capital expenditures, investing $839.7 million in Q2 fiscal 2025 compared to $645.9 million in the same period last year. Year-to-date capital spending reached $1.73 billion, up from $1.42 billion in the first half of fiscal 2024.

The company maintains a strong focus on safety and reliability, which accounts for 85% of total capital spending. As illustrated in the following capital spending breakdown:

The largest portion of safety and reliability spending ($760 million) is allocated to repairing and replacing transmission and distribution pipelines, followed by fortifications ($261 million) and service line replacement ($173 million).

Atmos Energy maintains a strong financial position with approximately $5.3 billion in available liquidity as of March 31, 2025. The company’s capitalization profile shows a conservative approach with 61% equity capitalization:

To support its operations, Atmos Energy issued $650 million in 5.00% 30-year senior notes in October 2024 and settled $379.5 million in equity forward arrangements. The company maintains strong investment grade credit ratings and has managed its debt maturity schedule to minimize refinancing risk:

Regulatory Environment

Atmos Energy continues to make progress with regulatory filings across its service territories. As of May 7, 2025, the company has implemented $153.2 million in annualized operating income increases for fiscal 2025, with an additional $389.1 million in progress.

The following table provides a comprehensive overview of key regulatory filings planned for fiscal 2025, organized by quarter:

These regulatory mechanisms are crucial for Atmos Energy’s ability to recover its investments in infrastructure. The company benefits from various regulatory tools across its jurisdictions, including annual rate stabilization mechanisms, infrastructure programs, and weather normalization adjustments:

Financial Outlook

Based on strong performance in the first half of fiscal 2025, Atmos Energy has raised its full-year EPS guidance to a range of $7.20 to $7.30, up from the previous range of $7.05 to $7.25. This represents an increase of approximately 5.4% to 6.9% from the fiscal 2024 EPS of $6.83.

The company’s detailed financial outlook for fiscal 2025 is presented in the following table:

Capital spending for fiscal 2025 is projected to reach approximately $3.7 billion, a significant increase from $2.94 billion in fiscal 2024. This higher capital expenditure is expected to support future earnings growth through regulatory recovery mechanisms.

The company also provided a breakdown of expected expenses for fiscal 2025:

Atmos Energy stock closed at $162.66 on May 7, 2025, near its 52-week high of $163.47, reflecting investor confidence in the company’s performance and outlook. The stock has shown strong momentum over the past year, with a 52-week low of $110.97.

The company’s consistent financial performance, strategic focus on safety and reliability investments, and successful regulatory approach continue to support its position as a stable utility investment with a long history of dividend growth.

Full presentation:

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