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Introduction & Market Context
Spire Inc. (NYSE:SR) reported second-quarter fiscal 2025 results on April 30, 2025, showing adjusted earnings per share of $3.60, a 4.3% increase from $3.45 in the same period last year. The natural gas utility company reaffirmed its full-year adjusted EPS guidance range of $4.40 to $4.60 while raising its capital expenditure target for the fiscal year.
The presentation was led by President and CEO Scott E. Doyle and Executive Vice President and CFO Adam W. Woodard, who outlined the company’s performance across its gas utility, midstream, and marketing segments.
As shown in the following key messages slide, Spire continues to focus on organic growth, infrastructure investment, and continuous improvement while maintaining its long-term adjusted EPS growth target of 5-7%:
Quarterly Performance Highlights
Spire reported Q2 FY25 adjusted earnings of $214.4 million, up from $196.6 million in Q2 FY24. This $17.8 million increase was primarily driven by strong performance in the Gas Utility and Midstream segments, partially offset by lower results in Gas Marketing.
The following chart illustrates the earnings breakdown by segment, showing the significant contribution from the Gas Utility business and the substantial growth in the Midstream segment:
Gas Utility earnings growth reflected higher Missouri Infrastructure System Replacement Surcharge (ISRS) revenues (+$8.7 million), improved Missouri usage net of weather mitigation (+$6.5 million), and Alabama Rate Stabilization and Equalization (RSE) contributions (+$5.7 million). These gains were partially offset by lower Alabama usage (-$7.1 million) and higher depreciation expense (-$4.1 million).
The Midstream segment showed impressive growth, driven by additional storage capacity, contract renewals at higher rates, and asset optimization. Meanwhile, Gas Marketing results declined slightly due to reduced volatility in regional basis differentials and higher transportation and storage fees.
Capital Investment Strategy
Spire has increased its capital expenditure target for FY25 to $840 million from the previously announced $790 million, while maintaining its 10-year capex plan of approximately $7.4 billion. Year-to-date capital spending reached $479 million, with a significant portion directed toward infrastructure upgrades, advanced meter installations, and new business development.
The following slide details the company’s robust capital expenditure plan, which is designed to support long-term earnings growth and drive rate base expansion:
The capital plan is heavily weighted toward safety and reliability investments, which account for 72% of FY25 gas utility investment. Customer expansion represents 15% of the planned spending, with the remaining 13% allocated to other initiatives.
This investment strategy is expected to drive 7-8% rate base growth for Spire Missouri and support the company’s long-term adjusted EPS growth target of 5-7%.
Regulatory Updates
A significant focus of the presentation was Spire Missouri’s rate case filing, which requests a $289.5 million revenue increase. The Missouri Public Service Commission (MoPSC) Staff has recommended a $246.2 million increase, with differences primarily related to cost of capital assumptions and discrete adjustments.
The following table outlines the key components of the rate case and the positions of both Spire Missouri and the MoPSC Staff:
Spire also highlighted the recent signing of Senate Bill 4 in Missouri, which will enable future test year ratemaking beginning in July 2026, potentially providing more timely recovery of investments.
Growth Outlook and Segment Performance
While reaffirming its full-year adjusted EPS guidance range of $4.40 to $4.60, Spire updated its segment-level earnings targets to reflect year-to-date performance. The Gas Utility segment forecast was reduced by approximately $11 million at the midpoint, while the Midstream segment was increased by $8 million and Gas Marketing by $4 million.
The following slide presents the updated segment outlook and illustrates the company’s long-term growth trajectory:
The company also noted that it now expects FY25 weighted shares outstanding of approximately 58.5 million, down from the previous estimate of 59 million, which should provide a slight benefit to per-share metrics.
Dividend Growth and Shareholder Returns
Spire continues its long history of dividend growth, with the 2025 annualized dividend increased by 4.0% to $3.14 per share. This marks the 22nd consecutive year of dividend increases and the 80th year of continuous dividend payments, earning the company a place in the S&P’s Dividend Aristocrats Index.
The following chart illustrates Spire’s consistent dividend growth over the past decade:
The company is targeting a dividend payout ratio of 55-65%, supported by its long-term earnings growth target of 5-7%.
Financial Position and Financing Strategy
Spire provided an update on its financing activities, noting that it has settled $75 million in forward equity sales in FY25 and priced $150 million in Spire Missouri First Mortgage Bonds, expected to fund on May 1. The proceeds will be used for general corporate purposes.
The company is targeting a funds from operations (FFO) to debt ratio of 15-16%, which supports its investment-grade credit ratings. Spire maintains stable outlooks from both Moody’s and S&P, with ratings of Baa2/BBB for the parent company’s senior unsecured debt.
Forward-Looking Statements
Looking ahead, Spire outlined its business priorities for FY25, focusing on operational excellence, regulatory outcomes, and financial performance. The company remains committed to delivering reliable natural gas service with a focus on safety, executing its $840 million capital plan, and managing costs to enhance customer affordability.
On the regulatory front, Spire aims to achieve constructive outcomes in its pending proceedings and strengthen recovery mechanisms. Financially, the company is focused on delivering adjusted earnings within its guidance range of $4.40 to $4.60 per share while maintaining balance sheet strength.
The company’s long-term strategy continues to center on organic growth, infrastructure investment, and continuous improvement, with a particular emphasis on customer affordability and cost management in the current economic environment.
Full presentation:
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