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Dec 31, 2019
Southwest Gas Q4 2019 Earnings Report
Southwest Gas Holdings' Q4 2019 earnings increased compared to Q4 2018.
Key Takeaways
Southwest Gas Holdings reported a consolidated net income of $91.7 million, or $1.67 per diluted share, for Q4 2019, compared to $69.3 million, or $1.36 per diluted share, for Q4 2018. The increase was primarily driven by an increase in income from COLI investments and growth in both the natural gas operations and utility infrastructure services segments.
Consolidated net income for Q4 2019 was $91.7 million, or $1.67 per diluted share, compared to $69.3 million, or $1.36 per diluted share, for Q4 2018.
Natural gas operations segment net income was $76.4 million for Q4 2019 compared to $59.5 million for Q4 2018, driven by a COLI cash surrender value increase.
Utility infrastructure services segment net income was $15.7 million for Q4 2019 and $9.9 million for Q4 2018, driven by incremental revenues associated with Linetec.
Management expects 2020 diluted earnings per share to be between $3.75 and $4.00.
Southwest Gas
Southwest Gas
Southwest Gas Revenue by Segment
Revenue by Segment
Natural Gas Distribution Revenue
CapyFin.com Forward Guidance
Management expects 2020 diluted earnings per share to be between $3.75 and $4.00.
Positive Outlook
- Operating margin for 2020 is anticipated to benefit from customer growth (1.7%).
- 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 Arizona results).
- Centuri’s revenues for 2020 are expected to be 5% to 10% greater than 2019 due to its stable base of large utility clients and related growth opportunities.
Challenges Ahead
- Pension costs expected to increase $13.6 million primarily due to lower discount rate.
- Approximately $5.2 million to be reflected in other expense.
- COLI earnings are estimated at $3 million to $5 million.
- Net income expectations reflect earnings attributable to Southwest Gas Holdings, net of earnings attributable to noncontrolling interests (estimated at approximately $4 million).
- Changes in Canadian currency exchange rates could influence results.