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Mar 31, 2020
Southwest Gas Q1 2020 Earnings Report
Southwest Gas Holdings' first quarter earnings decreased compared to the same period last year, impacted by losses in company-owned life insurance policies and challenges within the utility infrastructure services segment due to COVID-19.
Key Takeaways
Southwest Gas Holdings reported consolidated earnings of $1.31 per diluted share for Q1 2020, a decrease from $1.77 per diluted share in Q1 2019. Net income was $72.5 million, down from $94.8 million year-over-year, influenced by losses in COLI policies and a net loss in the utility infrastructure services segment.
Consolidated earnings per diluted share decreased by $0.46 year-over-year, from $1.77 to $1.31.
Net income for the natural gas segment decreased from $103.4 million to $83.6 million.
The utility infrastructure services segment experienced a net loss of $10.2 million, compared to a loss of $8 million in the prior year.
33,000 net new customers were added to the natural gas system.
Southwest Gas
Southwest Gas
Southwest Gas Revenue by Segment
Revenue by Segment
Natural Gas Distribution Revenue
CapyFin.com Forward Guidance
Management affirms estimated 2020 diluted earnings per share between $3.75 and $4.00. Operations of both segments are subject to future impacts related to COVID-19.
Positive Outlook
- Operating margin for 2020 is anticipated to benefit from customer growth of 1.6%.
- Operating margin for 2020 is anticipated to benefit from infrastructure tracker mechanisms.
- Operating margin for 2020 is anticipated to benefit from expansion projects.
- Operating margin for 2020 is anticipated to benefit from rate relief (including California attrition and anticipated partial-year results in Arizona and Nevada).
- Operating income is expected to increase 3% to 5%.
Challenges Ahead
- Governmental policies enacted to suppress the spread of COVID-19 may impact future results of the Company.
- The timing of processing utility general rate case applications may impact future results of the Company.
- Utility customer growth rates may impact future results of the Company.
- Operations and maintenance expense changes (including management cost cutting initiatives and the potential for higher bad debt expense) may impact future results of the Company.
- Timing of the release of Centuri project orders from its utility customers may impact future results of the Company.