HomeMost PopularInvestingSouthwest Gas Holdings Inc. Delivers Strong Q3 Earnings and Revenue, Exceeding Estimates

Southwest Gas Holdings Inc. Delivers Strong Q3 Earnings and Revenue, Exceeding Estimates

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Southwest Gas Holdings Inc. (SWX) has shown impressive performance in the third quarter of 2023, beating earnings and revenue estimates. The company reported operating earnings of 10 cents per share, surpassing the Zacks Consensus Estimate of 2 cents by a significant 400%. This also marks a notable improvement from a loss of 5 cents per share reported in the year-ago quarter. On a GAAP basis, earnings stood at 4 cents per share, compared to a loss of 10 cents in the prior-year period.

Total Revenues Surge

The company’s operating revenues amounted to $1,169.5 million in the quarter, outperforming the Zacks Consensus Estimate of $1,064 million by 9.9%. This marks a 3.9% improvement from the $1,125.6 million reported in the prior-year quarter.

Key Highlights

Southwest Gas reported total operating expenses of $1,109.3 million, reflecting a 3.1% increase from the comparable period in 2022. This rise can be attributed to an increase in the net cost of gas sold and utility infrastructure service expenses. The total operating income also showed a significant uptick, reaching $60.2 million, a 20.4% increase from the year-ago quarter.

The company has been experiencing robust customer additions, with total system throughput in the first nine months of 2023 reaching 175.6 million dekatherms, marking a 6.7% increase from the year-ago quarter.

Financial Highlights and Guidance

As of Sep 30, 2023, Southwest Gas reported cash and cash equivalents of $104.9 million, compared to $123.1 million as of Dec 31, 2022. The long-term debt, less current maturities, amounted to $5,235.5 million as of Sep 30, 2023, compared to $4,403.3 million as of Dec 31, 2022. The net cash provided by operating activities for the nine months ended Sep 30, 2023, was $198.4 million, a decrease from $303.3 million in the year-ago period.

The company has raised its capital expenditure guidance for the Natural Gas Distribution segment to $720-$740 million. This increase is driven by greater-than-expected customer growth and system improvements, with the expectation of enhancing safety and reliability. The guidance for the segment’s net income in 2023 has also been revised to $215-$225 million from the previously predicted band of $205-$215 million. Additionally, Southwest Gas expects a capital expenditure of $2 billion for 2023-2025, projecting a three-year rate base CAGR in the range of 5-7%.

Market Performance

Southwest Gas currently holds a Zacks Rank #3 (Hold).

Other Company Updates

In addition to Southwest Gas Holdings Inc.’s strong performance, fellow industry players have also demonstrated noteworthy results. ONE Gas, Inc. (OGS) reported third-quarter 2023 operating earnings per share (EPS) of 45 cents, surpassing the Zacks Consensus Estimate of 42 cents by 7.1%. Sempra Energy (SRE) reported third-quarter 2023 adjusted EPS of $1.08, exceeding the Zacks Consensus Estimate of $1.01 by 6.9%. Meanwhile, NorthWest Natural (NWN) recorded a narrower-than-expected loss in the third quarter of 2023.

If you are interested in exploring investment opportunities, you can view the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

To explore more investment insights and stock analysis, you can also download Zacks Investment Research’s free report here.

For detailed analysis and stock reports, you can access the free stock analysis reports for Sempra Energy (SRE), Southwest Gas Corporation (SWX), NorthWest Natural Gas Company (NWN), and ONE Gas, Inc. (OGS).

If you wish to read the complete article on Zacks.com, please click here.

For the latest recommendations from Zacks Investment Research, you can download the report on 7 Best Stocks for the Next 30 Days here.

Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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