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Sep 30, 2023
Southwest Gas Q3 2023 Earnings Report
Delivered strong third quarter growth in utility and Centuri net income, increased 2023 utility earnings and capital expenditures guidance, and reaffirmed 2023 Centuri revenue and EBITDA margin guidance.
Key Takeaways
Southwest Gas Holdings reported strong third quarter growth in utility and Centuri net income. The company increased its 2023 utility net income and capital expenditure guidance ranges, and reaffirmed its 2023 Centuri revenue and EBITDA margin guidance.
Utility earnings increased $19 million in the third quarter of 2023 over the third quarter of 2022 and Centuri results increased approximately $4 million over the same period.
Consolidated net earnings of $0.04 per diluted share (and adjusted consolidated net earnings of $0.10 per diluted share) for the third quarter of 2023, compared to consolidated net loss of $0.18 per diluted share (and adjusted consolidated loss of $0.05 per diluted share) for the third quarter of 2022.
Adjustments to third quarter 2023 earnings included $4 million of collective after-tax items, largely driven by costs incurred to facilitate the separation of Centuri as well as consulting fees related to a Utility optimization initiative.
Centuri Holdings, Inc. confidentially submitted a draft Registration Statement on Form S-1 with the SEC for the proposed initial public offering of newly issued Centuri Holdings, Inc. common stock.
Southwest Gas
Southwest Gas
Southwest Gas Revenue by Segment
Revenue by Segment
Natural Gas Distribution Revenue
CapyFin.com Forward Guidance
Southwest Gas provides guidance for 2023.
Positive Outlook
- Increasing 2023 net income guidance to $215 - $225 million (assumes $3 - $5 million of COLI earnings)
- Increasing 2023 capital expenditures guidance to $720 - $740 million primarily driven by greater than expected customer growth, as well as system improvements, and pipe replacement programs to enhance safety and reliability of our system
- 3 - Year capital expenditures of approximately $2.0 billion
- 3 - Year Utility rate base compound annual growth rate of 5% - 7%
- 2023 revenues of $2.8 billion to $3.0 billion for Centuri
Challenges Ahead
- IPO is subject to market and other conditions
- IPO is subject to the completion of the SEC's review process
- IPO is subject to the Southwest Gas Board of Directors approval to proceed with the transaction.
- Higher interest rates on variable-rate borrowings
- The Company can provide no assurances that an initial public offering and/or separation of Centuri will occur on the expected timeline or at all