Spire’s Loss Widens as Interest Costs Offset Utility Gains
Net interest expense climbed to $85.6 million, weighing on the gas utility’s quarterly results.
Spire Inc. (SR), the natural-gas utility, reported a wider fiscal third-quarter loss from continuing operations as higher financing and corporate costs offset improved utility performance. The loss widened to $42.6 million, or $0.72 a share, from $13.3 million, or $0.29 a share, a year earlier.
The quarter followed Spire’s shift toward a regulated-utility portfolio. The company sold Spire Marketing for $215 million in cash and Spire Storage for $650 million, including $600 million at closing and a $50 million payment due in fiscal 2027. Both businesses were classified as discontinued operations and excluded from continuing-operations results and guidance.
Operating revenue rose 19.2% to $420.2 million from $352.5 million a year earlier, while operating income increased 5.9% to $23.4 million. That disparity compressed the operating margin to about 5.6% from 6.3%. On an adjusted basis, the continuing-operations loss widened to $15.7 million from $13.3 million, though the loss narrowed to $0.26 a share from $0.29.
Gas Utility’s adjusted loss narrowed to $3.2 million from $10 million as results improved at both Spire Missouri and Spire Alabama. Contribution margin increased $30.6 million, supported by new rates, infrastructure-surcharge revenue, higher Alabama usage after weather mitigation, favorable capacity-management performance and off-system sales.
Those gains faced higher costs across the business. Gas Utility depreciation expense increased $11.8 million following capital investment and updated Missouri depreciation schedules, while taxes other than income taxes rose $4 million and utility interest expense increased $2.4 million. The adjusted loss in Other widened to $12.5 million from $3.3 million because of higher corporate costs and interest expense.
For the first nine months, adjusted earnings from continuing operations rose to $301.8 million, or $5.01 a share, from $248.1 million, or $4.05 a share. Gas Utility adjusted earnings increased to $335.5 million, while Other’s adjusted loss more than doubled to $33.7 million. Usage after weather mitigation increased at Spire Alabama and declined at Spire Missouri, extending the Missouri weakness highlighted in the prior quarter.
Spire reaffirmed fiscal 2026 adjusted earnings guidance of $3.90 to $4.10 a share, the range it set after lowering expectations because of weaker Missouri weather-related usage. The company continues to expect fiscal 2027 adjusted earnings of $5.40 to $5.60 a share and long-term annual growth of 5% to 7%.
Discontinued operations produced earnings of $253.8 million, including a $254.6 million after-tax gain on the asset sales, compared with income of $34.2 million a year earlier. Meanwhile, Piedmont Tennessee transaction, transition and financing costs increased sequentially to $36 million before tax from $30.8 million, leaving acquisition expenses and financing costs as continuing pressures after the portfolio overhaul.