Northwest Natural Company (NWN) Q2 2024 earnings summary

Executive summary

• Reported a Q2 2024 net loss of $2.8 million ($0.07/share), compared to net income of $1.2 million ($0.03/share) in Q2 2023, mainly due to regulatory lag, inflation, and higher expenses.

• Net income for the first six months of 2024 was $61.0 million ($1.60/share), down from $72.9 million ($2.03/share) in 2023.

• Customer base for gas and water utilities grew 1.8% over the last 12 months, adding nearly 16,000 connections, mainly from water acquisitions.

• Significant progress on gas and water rate cases, with all-party settlements filed and new Oregon rates expected November 1, 2024.

• Acquisitions of Puttman Infrastructure and ICH expand water and recycled water business, adding up to 19,000 customers and entering the California market.

Financial highlights

• Q2 2024 consolidated net loss was $2.8 million, a $4.0 million decrease from Q2 2023, with six-month net income down $11.9 million year-over-year.

• Utility margin increased $0.4 million in Q2, mainly from customer growth and amortization of deferrals; six-month margin was $328.5 million, up slightly.

• Gas utility O&M decreased $3.5 million in Q2 and $3.8 million year-to-date due to cost-saving measures and lower benefit costs.

• Capital expenditures for the first six months were $198.9 million, up from $144.9 million in 2023.

• Dividend per share for Q2 2024 was $0.4875, annualized at $1.95.

Outlook and guidance

• 2024 annual earnings guidance reaffirmed at $2.20–$2.40 per share, assuming continued customer growth and average weather.

• Long-term EPS growth targeted at 4%-6% compounded annually from 2022 through 2027.

• Capital expenditures for 2024 expected at $350–$400 million, with $1.4–$1.6 billion planned over 2024–2028.

• Guidance assumes no significant regulatory or legislative changes.

• Q3 2024 expected to be a loss of $0.74 to $0.86 per share; Q4 2024 expected earnings of $1.43 to $1.63 per share.