ONE Gas (OGS) Q3 2024 earnings summary

Executive summary

• Third quarter net income was $19.3 million ($0.34 per diluted share), down from $25.2 million ($0.45 per share) in Q3 2023; year-to-date net income was $145.8 million ($2.56 per share), down from $160.5 million ($2.87 per share) year-over-year.

• Operating income for Q3 2024 was $59.5 million, up from $57.2 million in Q3 2023, driven by new rates and customer growth.

• Raised and narrowed 2024 EPS guidance to $3.85–$3.95, with midpoint five cents higher than original guidance.

• Maintained a strong balance sheet and continued disciplined capital deployment.

• Declared a quarterly dividend of $0.66 per share ($2.64 annualized), unchanged from prior quarter, payable December 4, 2024.

Financial highlights

• Total revenues for Q3 2024 were $340.4 million, up from $335.8 million in Q3 2023; year-to-date revenues were $1.45 billion, down from $1.77 billion year-over-year.

• Cost of natural gas decreased to $59.6 million in Q3 2024 from $70.9 million in Q3 2023, reflecting lower commodity prices.

• Capital expenditures and asset removal costs were $571.7 million year-to-date, with full-year 2024 expected at $750 million.

• Net interest expense increased by $11.5 million in Q3, mainly due to higher rates and new debt issuances.

• O&M expenses up 5% year-to-date compared to 2023, consistent with long-term guidance.

Outlook and guidance

• 2024 EPS guidance raised to $3.85–$3.95, with net income expected in the range of $219–$226 million.

• Capital expenditures for 2024 projected at approximately $750 million.

• O&M expense growth expected to moderate in coming years.

• 2025 guidance to be issued before December Utility Week meetings.

• Management expects stable cash flow and earnings due to a large residential customer base and regulatory mechanisms.