Atmos Energy Beats Estimates, Raises EPS Guidance on Texas Rule Benefit and Customer Growth

Transcript intelligence

What changed

Atmos reported FY26 first-half net income of $985 million, with Q2 EPS of $3.47 beating the $3.41 consensus by 1.8% and revenue of $1.96 billion exceeding the $1.94 billion estimate by 1.1%. The company added over 51,000 customers in the past year, including 39,000+ in Texas. Texas House Bill 4384 contributed $94 million to H1 earnings. The final rulemaking of Texas Rule 7.7102 reclassifies post-service carrying costs and adds a $155–$165 million pretax benefit for FY26 without affecting net earnings. The dividend was increased approximately 15% year-over-year, reflecting both a rebasing of earnings and the regulatory impact. Capex reached $2 billion in H1 and remains on track for $4.2 billion in FY26.

Guidance delta

Full-year EPS guidance raised to $8.40–$8.50 from the prior outlook, reflecting higher APT through-system earnings, the Rule 7.7102 pretax benefit, and continued customer growth. Management targets an additional $0.08–$0.12 contribution from APT through-system business in H2 FY26 and expects roughly 40% of the $600 million in annualized operating-income increases from 13 pending regulatory filings to be realized in Q3.

Key takeaways

• Q2 EPS of $3.47 beat the $3.41 consensus by 1.8%; revenue of $1.96 billion exceeded the $1.94 billion estimate by 1.1%.
• Full-year EPS guidance raised to $8.40–$8.50 on the back of Texas Rule 7.7102 ($155–$165 million pretax benefit) and stronger APT through-system earnings.
• Customer base grew by over 51,000 in the past year, with 39,000+ additions in Texas alone.
• Capital spending reached $2 billion in H1 and remains on track for $4.2 billion in FY26, focused on safety, reliability, and system expansion.
• Dividend increased approximately 15% year-over-year, with management committing to incremental growth aligned to 6–8% EPS targets.

Management priorities

• Complete remaining FY26 capital projects to reach $4.2 billion in full-year capex.
• Implement the $155–$165 million pretax benefit from final Texas Rule 7.7102 rulemaking.
• Advance 13 regulatory filings targeting nearly $600 million of annualized operating-income increases, with ~40% expected in Q3.
• Grow APT through-system business by an additional $0.08–$0.12 in H2 FY26.
• Maintain incremental dividend growth consistent with 6–8% EPS growth targets.