Key Takeaways
Atmos Energy Corp. (NYSE: ATO) raised its fiscal 2026 earnings guidance after posting second-quarter profits that topped analyst estimates, citing benefits from rate increases, customer growth, and favorable regulatory changes in Texas. The company now expects earnings of $8.40 to $8.50 per share for the full year.
"Their commitment has us well-positioned for the remainder of the fiscal year," President and Chief Executive Officer Kevin Akers said in a statement, referring to the company's employees and operating performance.
The natural gas utility reported adjusted earnings of $3.47 per share for the quarter ended March 31, surpassing the Zacks Consensus Estimate by 10 cents. Revenue for the quarter was $1.96 billion, missing the consensus estimate by 12.33 percent but remaining roughly flat compared to the $1.95 billion reported in the same period a year ago.
The outlook improvement is supported by new Texas regulations that accelerate the recovery of capital investments. Chief Financial Officer Christopher T. Forsythe said the company expects a full-year pre-tax benefit of $155 million to $165 million from the rule changes. Following the report, Citi raised its price target on Atmos to $191 from $182 while maintaining a Neutral rating.
Atmos, which serves over 3.3 million customers across eight states, continued its heavy investment in infrastructure, spending $2 billion on capital expenditures in the first half of fiscal 2026. Akers noted that more than 89 percent of this investment was directed toward improving the safety and reliability of its systems.
The company's customer base continues to expand, with more than 51,000 new customers added in the 12 months through March. Growth was particularly strong in Texas, which accounted for over 39,000 of the new additions, driven by population and business growth in areas like the Dallas-Fort Worth Metroplex. To meet rising demand, the company recently completed a 44-mile pipeline expansion west of Fort Worth.
The updated guidance suggests management is confident that strong operational performance and a supportive regulatory environment will continue. Investors will look for further details on segment margins and the impact of capital spending during the company's next earnings call.
This article is for informational purposes only and does not constitute investment advice.
