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Jun 30, 2023
Southwest Gas Q2 2023 Earnings Report
Reported strong second quarter results for utility net income and Centuri revenue.
Key Takeaways
Southwest Gas Holdings reported strong second quarter financial results, with the utility segment's net income up $21 million and Centuri's revenue up approximately $14 million compared to the same period last year. The company is progressing on its strategic priorities, including the spin-off of Centuri.
Southwest Gas Corporation earnings increased by $21 million in Q2 2023 compared to Q2 2022.
Centuri Group, Inc. results increased by approximately $14 million compared to the same period.
Consolidated net earnings were $0.40 per diluted share (adjusted $0.47) for Q2 2023, compared to $(0.10) per diluted share (adjusted $0.23) for Q2 2022.
The company advanced Centuri spin by confidentially submitting a draft Registration Statement on Form 10 with the SEC.
Southwest Gas
Southwest Gas
Southwest Gas Revenue by Segment
Revenue by Segment
Natural Gas Distribution Revenue
CapyFin.com Forward Guidance
Southwest Gas provided guidance for 2023, including net income for the natural gas distribution segment and revenue and adjusted EBITDA margin for Centuri.
Positive Outlook
- 2023 net income guidance of $205 - $215 million (assumes $3 - $5 million of COLI earnings) for Natural Gas Distribution.
- Increasing 2023 capital expenditures guidance to $700 - $720 million in support of customer growth, system improvements, and pipe replacement programs for Natural Gas Distribution.
- 3 - Year capital expenditures of approximately $2.0 billion for Natural Gas Distribution.
- 3 - Year utility rate base compound annual growth rate of 5% - 7% for Natural Gas Distribution.
- 2023 revenues of $2.8 billion to $3.0 billion for Centuri.
Challenges Ahead
- Centuri Separation is subject to, among other things, the receipt of a favorable Internal Revenue Service private letter ruling relating to the tax-free nature of the transaction.
- Centuri Separation is subject to SEC review and Form 10 effectiveness.
- Centuri Separation is subject to final approval by the Southwest Gas Board of Directors.
- The company can provide no assurance that its discussions about future operating margin, operating income, COLI earnings, interest expense, and capital expenditures of the natural gas distribution segment will occur.
- The company can provide no assurance regarding segment revenues, EBITDA, EBITDA margin or growth rates, that projects expected to be undertaken with results as stated will occur, nor that interest expense patterns will transpire as expected