Spire beats earnings estimates, hikes dividend 5.1%
Natural gas utility affirms FY26 guidance as regulatory strategy drives strong first-quarter performance
Spire Inc. shares advanced in Tuesday morning trading after the natural gas utility operator topped earnings expectations and boosted its dividend for the 23rd consecutive year, signaling confidence in its regulatory strategy and long-term growth trajectory.
The St. Louis-based company reported fiscal first-quarter adjusted earnings per share of $1.77, surpassing analyst estimates of $1.64, representing a 7.7% beat. Revenue of $762.2 million exceeded projections of $723.9 million by 5.3%, according to the company's earnings announcement.
Net income for the quarter rose to $95.0 million, or $1.54 per diluted share, compared with $81.3 million, or $1.34 per share, in the prior-year period. The performance reflects what chief executive Scott Doyle described as "strong first quarter results" driven by the company's regulatory strategy across its operating territories.
Spire's board declared a quarterly dividend of $0.825 per share, a 5.1% increase that marks the 23rd straight year of annualized dividend increases. The dividend, payable April 2 to shareholders of record March 11, represents an annualized payout of $3.30 and implies a dividend yield of approximately 4.0% at current levels.
The company affirmed its fiscal 2026 adjusted EPS guidance of $5.25 to $5.45 per share and maintained fiscal 2027 guidance of $5.65 to $5.85 per share. These projections notably exceed sell-side expectations of approximately $4.50 for the current year, according to analyst commentary.
Spire's regulatory initiatives remain central to its growth strategy. The company filed a rate case in Missouri in November seeking new rates effective by October 2025, while also submitting its fifth Infrastructure System Replacement Surcharge request seeking an additional $19 million in revenues. In Alabama, recently approved regulatory frameworks are expected to enable constructive cost recovery and earnings generation.
The utility operator has outlined an $809 million capital expenditure plan for fiscal 2026, with a 10-year capital program totaling $7.4 billion, of which 98% is directed toward utility growth. Continued investments in the Gas Utility segment, largely recoverable under infrastructure surcharge mechanisms, are expected to mitigate regulatory lag and support earnings growth.
Analysts have responded positively to the results and outlook. Spire holds an average "Moderate Buy" rating from 12 firms, with a mean 12-month price target of $88.82, according to MarketBeat data. Some analysts have raised price targets up to $100. The dividend increase is viewed as an indicator of the board's confidence in Spire's long-term financial expectations and growth strategy.
The expected closure of Spire's Tennessee acquisition in the first quarter of 2026 is projected to enhance scale and growth, supporting a 5-7% EPS trajectory beyond fiscal year 2026. This acquisition, combined with rate base growth of approximately 7% in Missouri and regulated equity growth of 6% in Alabama and the Gulf region, underpins the company's long-term adjusted EPS growth target.
Spire shares, which have traded in a 52-week range of $65.70 to $90.20, closed Monday at $85.32, giving the company a market capitalization of approximately $5 billion. The stock carries a relatively low beta of 0.689, reflecting the defensive characteristics typical of regulated utility investments.
Potential risks highlighted by analysts include warmer-than-expected winters, shifts in the regulatory environment, rising interest rates, and the possibility of a shutdown of the STL Pipeline. However, the company's affirmed guidance and continued dividend growth suggest management remains confident in navigating these challenges while delivering sustainable value to shareholders.