This article first appeared on GuruFocus.

Diluted Earnings Per Share: $7.46, marking the 23rd consecutive year of EPS growth.

Customer Growth: Added approximately 57,000 residential customers, 3,200 commercial customers, and 29 industrial customers in fiscal '25.

Capital Spending: Increased to $3.6 billion, with 87% dedicated to safety and reliability improvements.

Rate Base: Increased by 14% to an estimated $21 billion as of September 30.

Operating and Maintenance Expenses: $874 million, slightly above the midpoint of updated guidance for fiscal '25.

Annualized Operating Income Increases: $334 million implemented in fiscal '25.

Equity Capitalization: 60% with approximately $4.9 billion of available liquidity.

Fiscal '26 EPS Guidance: Initiated in the range of $8.15 to $8.35.

Dividend Increase: Fiscal '26 annual dividend of $4, a 15% increase over fiscal '25.

Five-Year Capital Spending Plan: Approximately $26 billion, with over 85% allocated to safety and reliability.

Anticipated Rate Base Growth: 13% to 15% annually, reaching approximately $42 billion by fiscal 2030.

Warning! GuruFocus has detected 9 Warning Signs with ATO.

Is ATO fairly valued? Test your thesis with our free DCF calculator.

Release Date: November 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Atmos Energy Corp (NYSE:ATO) reported diluted earnings per share of $7.46, marking the 23rd consecutive year of earnings per share growth.

The company experienced solid customer growth, adding approximately 57,000 residential customers and nearly 3,200 commercial customers in fiscal 2025.

Atmos Energy Corp (NYSE:ATO) plans to invest $26 billion over the next five years, with 85% allocated to safety and reliability, supporting system modernization.

The passage of Texas House Bill 4384 allows Atmos Energy Corp (NYSE:ATO) to recover over 95% of its capital spending within six months, enhancing capital recovery.

The company has a strong balance sheet with an equity capitalization of 60% and approximately $4.9 billion of available liquidity, supporting future operations.

Atmos Energy Corp (NYSE:ATO) faces potential risks from fluctuating gas prices, as seen with recent volatility in Waha gas prices.

The company anticipates a 4% annual increase in O&M costs, driven by system safety, monitoring, and employee costs, which could impact profitability.

Despite strong capital recovery mechanisms, the company does not assume the approval of new regulatory features in its five-year plan, which could limit future flexibility.

The company's growth projections are heavily reliant on the Texas market, with 80% of planned capital spending allocated to Texas, posing geographic concentration risk.

Atmos Energy Corp (NYSE:ATO) plans approximately $16 billion of incremental long-term financing over the next five years, which could increase financial leverage.

Q: Can you discuss the demand from larger-load customers and how it is reflected in your capital plan? A: John Akers, President and CEO, explained that 85% of their capital spend is dedicated to safety and reliability, with some modest growth included. The plan includes fortifications to support growth due to population increases in Texas and anticipated natural gas demand.

Q: How does the capital recovery process optimize growth, and what improvements have been made? A: John Akers noted that the jurisdictions they serve support natural gas, which aids in capital recovery. The planning process has been consistent since 2011, focusing on system needs for safety, reliability, and growth. The process is well-orchestrated through demand and integrity models.

Q: With the rebased EPS guidance, what is the impact of Texas House Bill 4384 on capital recovery? A: John Akers stated that the improvement in capital recovery is due to House Bill 4384, which allows for the inclusion of APT's investment. Christopher Forsythe, CFO, added that the five-year plan assumes no new regulatory features, focusing on existing mechanisms.

Q: How are you addressing the recent fluctuations in Waha gas prices in your guidance? A: John Akers mentioned that they do not incorporate short-term market fluctuations into their five-year plan, assuming normal activity instead. Christopher Forsythe added that any impact would benefit customers, and they will monitor the situation.

Q: Can you clarify the impact of Texas HB 4384 on your dividend guidance? A: Christopher Forsythe explained that the dividend was increased by 15% to align with the rebased EPS guidance. They intend to grow the dividend by 6% to 8% over the next five years, reflecting the stability provided by HB 4384.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.