Spire Q3 FY2026 earnings: Utility improvement was offset by higher corporate and transaction costs

Spire (NYSE: SR) reported fiscal Q3 2026 operating revenue of $420.2 million, up 19.2% from $352.5 million, while diluted EPS from continuing operations was $(0.72), versus $(0.29) a year earlier. Gas Utility results improved with support from new rates and higher Alabama usage, but higher corporate, interest and acquisition-related costs weighed on consolidated continuing operations.

Core earnings data

Revenue increased by $67.7 million, but operating expenses rose by $66.4 million. As a result, operating income increased only 5.9%, and the operating margin declined to approximately 5.6% from 6.3%.

The continuing-operations adjusted loss widened by $2.4 million, even though adjusted loss per share narrowed by $0.03. Diluted shares were unchanged at 59.1 million, while preferred dividend provisions fell to zero from $3.7 million, helping explain the more favorable per-share comparison.

Adjusted earnings are non-GAAP and exclude acquisition, divestiture and restructuring effects, impairments and certain other unusual items.

Business and segment performance

The Gas Utility segment recorded an adjusted loss of $3.2 million, improving by $6.8 million from the prior-year loss of $10.0 million. Management attributed the improvement to new Spire Missouri rates effective in October 2025, higher Missouri Infrastructure System Replacement Surcharge revenue and Spire Alabama rates under the RSE mechanism that took effect in December 2025.

Utility results also benefited from higher Alabama usage after weather mitigation, favorable Cost Control Mechanism performance and off-system sales in Missouri and Alabama. Management said contribution margin increased by $30.6 million on its utility comparison basis.

These benefits were partly absorbed by higher costs. Utility depreciation increased by $11.8 million because of capital investment and updated Missouri depreciation schedules, while taxes other than income taxes rose by $4.0 million. Utility interest expense increased by $2.4 million due to higher long-term debt balances, partly offset by lower interest rates.

The Other category moved in the opposite direction. Its adjusted loss widened to $12.5 million from $3.3 million, primarily because of higher corporate costs and interest expense. That $9.2 million deterioration more than offset the improvement in Gas Utility earnings, leaving the consolidated adjusted loss modestly worse in dollar terms.

Divestiture gains drove total net income despite the continuing loss

Spire completed the divestitures of Spire Marketing and Spire Storage during the quarter. Discontinued operations generated $253.8 million of net income, including a $254.6 million after-tax gain on sale. This gain allowed Spire to report total net income of $211.2 million even though continuing operations lost $42.6 million.

The difference between the GAAP continuing loss and the adjusted loss also reflected $36.0 million of pre-tax acquisition, transition and financing costs related to the Piedmont Tennessee transaction, plus a $1.5 million impairment. The related income-tax adjustment was $10.6 million.

Cash flow and balance sheet

Cash-flow figures were provided for the first nine months of fiscal 2026 rather than Q3 alone. Operating cash flow increased to $613.6 million from $582.9 million, while capital expenditures declined to $608.4 million from $699.7 million. Operating cash flow therefore roughly covered capital spending during the nine-month period.

Portfolio transactions required substantial financing. Spire spent $2.50 billion on business acquisitions and received $819.9 million from sales of discontinued operations. Financing activities provided $1.67 billion of net cash, including $2.49 billion from long-term debt issuance.

At June 30, 2026, cash and cash equivalents were $20.7 million. Long-term debt stood at $5.76 billion, up from $3.37 billion at September 30, 2025. The higher debt balance and associated interest costs will be important when assessing how quickly the benefits from the utility-focused portfolio translate into continuing earnings.

Earnings guidance

Spire reaffirmed its fiscal 2026 and fiscal 2027 adjusted EPS ranges, as well as its long-term growth target. The fiscal 2026 outlook reflects continuing operations and excludes Spire Tennessee, while the fiscal 2027 range includes a full year of earnings from that business.

Spire expects fiscal 2026 capital expenditures for continuing operations of $797 million. Its longer-term plan calls for $11.2 billion of capital investment through fiscal 2035. The company stated that its 5%–7% growth target uses the original fiscal 2027 adjusted EPS guidance midpoint of $5.75 as the base.

Recent insider transactions

The supplied insider data show 16,120 shares purchased across 11 transactions and 3,822 shares sold in one transaction during the past six months, for net purchases of 12,298 shares. The latest ten supplied records include three open-market purchases by director Paul D. Koonce, one sale by Chief Technology Officer Ryan L. Hyman and six director stock awards.

Stock awards are compensation-related grants and should be distinguished from open-market purchases. The reported transactions do not, by themselves, establish insiders’ views on Spire’s outlook.

Risks investors should watch

• Financing costs and leverage: Quarterly net interest expense increased to $85.6 million from $47.9 million, while long-term debt rose substantially from the fiscal 2025 year-end level. Continued financing pressure could limit the earnings benefit from utility growth.
• Transaction and integration execution: The quarter included $36.0 million of acquisition-related costs, and fiscal 2027 guidance assumes a full year of contributions from Spire Tennessee. Costs or delays associated with the reshaped portfolio could affect the earnings path.
• Cost recovery and utility margins: New rates supported contribution margin, but depreciation, property taxes and interest expense also increased. Future profitability depends on rate mechanisms and operating performance keeping pace with the cost of infrastructure investment.
• Dependence on operating benefits: Gas Utility earnings benefited from Alabama usage, favorable CCM performance and off-system sales. Changes in these factors could reduce the segment’s year-over-year improvement.

Summary

Spire’s fiscal Q3 revenue and Gas Utility performance improved, supported by new rates, infrastructure-related revenue and favorable utility operating factors. However, higher corporate and financing costs, along with acquisition-related charges, widened the continuing-operations GAAP loss. Divestiture gains drove total net income, making continuing earnings, debt-related costs, Spire Tennessee’s contribution and execution of the capital plan the main items to monitor after the quarter.