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    Earnings call· Jun 2026(Q3 FY26)

    SPIRE Q3 FY26 earnings call SR

    Aug 5, 2026 Source

    Executive summary

    Spire Q3 FY26 — Fully Regulated Focus and Reaffirmed EPS Growth

    Spire Inc. reported Q3 FY26 results in line with expectations, marking a significant quarter with the completion of non-core divestitures and a sharpened focus on fully regulated utility operations. The company reaffirmed its long-term EPS growth target, supported by a substantial capital plan and constructive regulatory frameworks. Management emphasized a commitment to operational excellence, customer affordability, and disciplined financial management, with ongoing regulatory progress across its jurisdictions.

    Highlights

    5

    • Adjusted earnings per share from continuing operations improved by $0.03 per share, from a loss of $0.29 to $0.26 per share in the prior year quarter.

    • Completed divestitures of Spire Marketing and Spire Storage, transforming into a fully regulated company.

    • Reaffirmed fiscal 2026 adjusted EPS guidance of $3.90 to $4.10 per share and fiscal 2027 guidance of $5.40 to $5.60 per share.

    • Reaffirmed long-term adjusted EPS growth target of 5% to 7% using the original FY27 guidance midpoint of $5.75 as the base.

    • Reached a settlement in the Missouri accounting authority order proceeding, providing a path to improve revenue recovery and reduce earnings volatility.

    Concerns

    4

    • Reported an adjusted loss of $0.26 per share from continuing operations in Q3 FY26.

    • O&M expense increased by approximately $4 million, primarily due to higher bad debt expense.

    • Other activities reported an adjusted loss of $12 million, reflecting higher corporate costs and interest expense.

    • Current FFO to debt stands at 13%, below the target of 14% to 15% expected by the end of 2028.

    Guidance & targets

    12
    CategoryTargetConfidence
    Long-term adjusted EPS growth target
    5% to 7%
    high materiality
    High
    Adjusted EPS guidance from continuing operations
    $3.90 to $4.10 per share
    high materiality
    High
    Adjusted EPS guidance
    $5.40 to $5.60 per share
    high materiality
    High
    Rate base growth
    7%
    medium materiality
    High
    Rate base growth
    7.5%
    medium materiality
    High
    Regulated equity growth
    6%
    medium materiality
    High
    Full year capital expenditures
    approximately $800 million
    medium materiality
    High
    FFO to debt target
    14% to 15%
    medium materiality
    High
    Missouri interest revenues
    $21 million
    low materiality
    High
    Spire Tennessee revenue increase
    $14 million
    low materiality
    High
    Missouri future test year rate case filing
    Filing expected
    medium materiality
    High
    FY28 EPS guidance
    Expected on year-end call
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Gas Utilities
    The improvement was primarily driven by new rates in Missouri (ISRS) and Alabama (CCM), and higher customer usage net of weather mitigation in Alabama, partially offset by lower usage net of weather mitigation in Missouri. O&M expense increased primarily due to higher bad debt expense. Results were also affected by higher depreciation, taxes other than income taxes, and interest expense.
    Prior year adjusted loss: $10 millionO&M expense increase: $4 million
    		———Adjusted loss of $3 million
    Other Activities
    Reflects higher corporate costs and higher interest expense in the current year.
    Prior year adjusted loss: $3 million
    		———Adjusted loss of $12 million

    Operational metrics

    11
    Adjusted loss from continuing operations
    $15 millionvs. $13 million loss in Q3 FY25
    Q3 FY26

    Reported for the quarter, in line with expectations.

    Adjusted EPS from continuing operations
    $0.26 lossvs. $0.29 loss in Q3 FY25
    Q3 FY26

    Improved by $0.03 per share compared to the prior year quarter.

    Preferred dividend expense
    $0.06did not recur this year
    Q3 FY25

    Fiscal 2025 results included this expense, which did not recur this year following the redemption of preferred shares.

    O&M expense increase
    $4 million
    Q3 FY26

    Primarily due to higher bad debt expense.

    Utility run rate O&M
    below the rate of inflation
    Current

    Continues to track below the rate of inflation.

    Earnings from discontinued operations
    $253.8 million
    Q3 FY26

    Includes an after-tax gain on sale of $254.6 million.

    After-tax gain on sale
    $254.6 million
    Q3 FY26

    Part of earnings from discontinued operations.

    Interest rate hedge portfolio
    $375 million
    Current

    Helps mitigate exposure to higher borrowing costs.

    Authorized ROE
    9.8%
    Annual

    Reflected in Spire Tennessee's first annual review mechanism filing.

    Capital structure
    49% equity and 51% debt
    Annual

    Reflected in Spire Tennessee's first annual review mechanism filing.

    Rate base
    $1.5 billion
    as of December 31, 2025

    Reflected in Spire Tennessee's first annual review mechanism filing.

    Industry KPIs

    5
    MetricValueDetails
    Ffo to debt13%%
    Adjusted operating EPS$0.26 lossper share
    Regulatory rate base growth7%%
    Equity hybrid financing atm issuance$375 millionUSD
    CAPEX multi year capital investment plan$11.2 billionUSD

    Deals & partnerships

    4
    Spire MarketingSale of non-core business

    Completed divestiture in Q3 FY26, contributing to the transformation to a fully regulated company.

    Spire StorageSale of non-core business

    Completed divestiture in Q3 FY26, contributing to the transformation to a fully regulated company.

    Spire MississippiSale of non-core business

    Sale still targeted to close in the first quarter of fiscal 2027.

    Spire TennesseeIntegration of acquired utility operations

    Integration progressing well, with key milestones to exit transition services in fiscal 2027.

    Capital programs

    2
    10-year capital planunderway$11.2 billion
    Funding: operating company debt and cash from operations
    Start: FY26

    Benefit: Supports 7% rate base growth in Missouri, 7.5% in Tennessee, 6% regulated equity growth in Alabama and Gulf

    This plan underpins confidence in delivering 5% to 7% adjusted EPS growth over time. Requires limited annual equity issuance.

    Fiscal 2026 capital expendituresunderwayapproximately $800 million
    Period spend: nearly $600 million
    Spent to date: nearly $600 million (first nine months)
    Start: FY26

    Benefit: System upgrades, infrastructure modernization, and new business connections

    Consistent with the 10-year $11.2 billion capital plan. Nearly $600 million invested in the first nine months of the year.

    Risks & headwinds

    4
    Higher bad debt expenseQ3 FY26

    $4 million increase in O&M

    Mitigation: Utility run rate O&M continues to track below the rate of inflation.

    Higher corporate costs and interest expenseQ3 FY26

    Contributed to $9 million increase in adjusted loss for 'other activities'

    Transition year for credit metricsFY26

    FFO to debt currently 13% vs. target 14-15%

    Mitigation: Expect to reach FFO to debt target of 14% to 15% by the end of 2028. Gain on sale of divested businesses pushes this metric higher through the transition period.

    Weather and usage variabilityPast year

    Lost margin from lower weather-related usage (not quantified in settlement)

    Mitigation: Missouri AAO settlement provides a path for collaboration to develop improvements or consider a potential alternative to the WNAR in the next rate case, aiming for a durable and permanent solution.

    What to watch in Q4 FY26

    5

    Alabama RSE Renewal Decision

    September
    CurrentHearings scheduled for August 6 and 7
    TargetDecision from the commission

    Why it matters

    The RSE renewal will determine key elements like authorized ROE, ROE range, and capital structure, impacting future rate-setting and investment recovery.

    We look forward to wrapping up the hearings that are scheduled later this week and then expect a decision from the commission later in September.

    Q&A highlights

    5

    Asked about key factors supporting higher allowed ROEs for Alabama and Gulf, and which elements (term, customer charge, control mechanisms) are most relevant in the upcoming renewal hearings.

    Management explained the process is similar to past renewals but now more public. They justified the ROE requests by current market conditions and alignment with regional averages, citing legislative guidance. They highlighted the value of the cost control mechanism for customers.

    “We are solidly in that range and feel comfortable with both our request and where we sit today.”

    asked by Luke Fenker · answered by Scott Doyle

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Transformation

    Spire completed the divestitures of Spire Marketing and Spire Storage, transitioning to a fully regulated company. This move is expected to reduce earnings volatility and enhance predictability, with the sale of Spire Mississippi still targeted for Q1 FY27. The company's future earnings are now supported by rate base growth and constructive regulatory mechanisms, aligning with its goal to deliver predictable earnings growth and long-term value creation.

    02

    Regulatory Progress in Alabama

    The RSE renewal process for Spire Alabama and Spire Gulf is progressing, with hearings scheduled for August 6 and 7. Spire has requested an adjusting point ROE of 10.5% for Spire Alabama and 10.75% for Spire Gulf, asserting these requests are within the regional average. Management expects a decision from the commission later in September, highlighting the RSE framework's support for predictable regulatory outcomes and timely investment recovery.

    03

    Missouri Regulatory Developments

    A settlement was reached in the accounting authority order (AAO) proceeding in Missouri, focusing on enhancing the weather normalization adjustment rider (WNAR) and committing to collaborative work for a durable solution to reduce earnings volatility. This settlement does not quantify or allow recovery of past lost margin. Additionally, Spire filed a request to recover approximately $21 million of interest revenues, with new rates expected in November, and plans to file its first Missouri future test year rate case in early November 2026.

    04

    Spire Tennessee Integration and Regulatory Filing

    The integration of Spire Tennessee continues to progress well, with key milestones to exit transition services expected in fiscal 2027. The subsidiary filed its first annual review mechanism in May 2026, requesting a $14 million revenue increase. This filing reflects an authorized ROE of 9.8%, a capital structure of 49% equity and 51% debt, and a rate base of $1.5 billion as of December 31, 2025, with new rates anticipated by October 1, 2026.

    05

    Capital Investment and Financing Strategy

    Spire invested nearly $600 million in capital expenditures in the first nine months of FY26, primarily for system upgrades, infrastructure modernization, and new business connections. The company expects full-year FY26 capex of $800 million, consistent with its $11.2 billion 10-year capital plan. This plan is substantially funded by operating company debt and cash from operations, requiring limited annual equity issuance, and is supported by a $375 million interest rate hedge portfolio to mitigate rising borrowing costs.

    AI-generated summary of the company’s earnings call. Not investment advice.