Core Points - ONE Gas, Inc. announced the retirement of John W. Gibson as chair of the board after the Annual Meeting for Shareholders in May 2026, marking his leadership since the company's inception in 2014 [1] - Deborah A.P. Hersman has been elected as the new chair of the board, effective May 21, 2026, following a comprehensive succession planning process [1] - Hersman brings extensive experience in safety, technology, and public policy, having previously served as chair of the National Transportation Safety Board and chief safety officer of Waymo [1][6][7] Company Overview - ONE Gas, Inc. is a 100-percent regulated natural gas utility, trading on the New York Stock Exchange under the symbol "OGS" and included in the S&P MidCap 400 Index [3] - The company provides reliable and affordable energy to over 2.3 million customers across Kansas, Oklahoma, and Texas, with divisions including Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service [4] Leadership Transition - John W. Gibson's leadership is credited with creating value for shareholders and establishing a framework for growth during his tenure [1] - Deborah Hersman's election is seen as a move to strengthen the board's diversity of experience and strategic focus, aligning with the company's commitment to operational excellence and sustainable growth [1][2]

Core Points - ONE Gas, Inc. announced a dual listing of its common stock on NYSE Texas, effective November 11, 2025, alongside its primary listing on the New York Stock Exchange [1][3] - The dual listing is part of ONE Gas's commitment to Texas, aiming to enhance investor access and awareness of its mission to provide safe and affordable natural gas services [2][3] - ONE Gas is recognized as one of the largest regulated natural gas utilities in the United States and is included in the S&P MidCap 400 Index [4] Company Overview - ONE Gas, Inc. is a fully regulated natural gas utility, serving over 2.3 million customers across Kansas, Oklahoma, and Texas [5] - The company operates through three divisions: Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service, which are the largest and third-largest natural gas distributors in their respective states [5] Additional Information - The company will continue to trade under the ticker symbol "OGS" on both NYSE and NYSE Texas [3] - ONE Gas's president and CEO emphasized the importance of community ties and the strategic nature of this dual listing [2]

Financial Performance - Net income for the three months ended September 30, 2025, was $26,466,000, compared to $19,268,000 for the same period in 2024, representing an increase of 37.0%[19] - For the nine months ended September 30, 2025, net income was $177,918,000, up from $145,828,000 in 2024, reflecting a growth of 21.9%[19] - ONE Gas reported net income of $119.4 million for the three months ended March 31, 2025, compared to $99.3 million for the same period in 2024, representing a 20.3% increase[37] - For the three months ended September 30, 2025, the net income available for common stock was $26.466 million, resulting in a basic EPS of $0.44, compared to $19.268 million and $0.34 for the same period in 2024, representing a 37.5% increase in net income[64] - For the nine months ended September 30, 2025, the net income available for common stock was $177.918 million, leading to a basic EPS of $2.96, up from $145.828 million and $2.57 in the same period of 2024, indicating a 21.9% increase in net income[64] Revenue and Sales - Total revenues for the nine months ended September 30, 2025, were $1.738 billion, up from $1.453 billion for the same period in 2024, reflecting an increase of 19.7%[37] - Natural gas sales to customers for the three months ended September 30, 2025, were $327.0 million, compared to $289.2 million for the same period in 2024, a growth of 13.1%[37] Assets and Liabilities - Total assets as of September 30, 2025, amounted to $8,504,274,000, compared to $8,425,571,000 as of December 31, 2024, indicating an increase of 0.9%[21] - The company reported a decrease in accounts receivable, net, to $210,173,000 as of September 30, 2025, from $408,448,000 as of December 31, 2024, a reduction of 48.7%[21] - The total current liabilities as of September 30, 2025, were $1,453,934,000, slightly down from $1,458,276,000 as of December 31, 2024, a decrease of 0.3%[23] - Total equity as of September 30, 2025, was $3,182,376,000, up from $3,104,548,000 as of December 31, 2024, representing a growth of 2.5%[23] - The total long-term debt, net, increased to $2,635.78 million as of September 30, 2025, compared to $2,414.26 million as of December 31, 2024[52] Cash Flow and Expenditures - Cash provided by operating activities for the nine months ended September 30, 2025, was $535,818,000, compared to $305,781,000 in 2024, showing a significant increase of 75.0%[25] - Capital expenditures for the nine months ended September 30, 2025, totaled $539,433,000, compared to $523,590,000 in 2024, reflecting an increase of 3.0%[25] - The company’s cash, cash equivalents, and restricted cash at the end of the period were $20,785,000, down from $78,537,000 at the beginning of the period, a decline of 73.5%[25] Dividends - The company paid dividends totaling $120,505,000 for the nine months ended September 30, 2025, compared to $112,064,000 in 2024, an increase of 7.5%[25] - The company issued common stock dividends of $0.67 per share, totaling $40.2 million for the three months ended September 30, 2025[37] - The company declared a dividend of $0.67 per share in November 2025, equating to an annualized rate of $2.68 per share[60] Regulatory and Risk Management - The allowance for doubtful accounts was $11.9 million as of September 30, 2025, down from $14.9 million at the end of 2024, indicating improved credit risk management[33] - The company maintains a provision for doubtful accounts based on credit risk assessments, with approximately 2.3 million customers across three states, mitigating concentration of credit risk[181] - The company is subject to various regulatory initiatives that may impact future earnings potential, as detailed in the "Regulatory Activities" section of the financial report[86] - The company utilizes purchased-gas cost adjustment mechanisms to pass through natural gas costs to customers, which helps mitigate commodity price risk[179] Pension and Other Benefits - The net periodic benefit cost for pension benefits for the three months ended September 30, 2025, was $1.427 million, compared to a credit of $(1.386) million in 2024, reflecting a significant change in costs[65] - The company transferred approximately $41.6 million of assets and liabilities related to certain participants in its defined benefit pension plan to a third-party insurance company in August 2025[69] - The company’s obligations under the nonqualified deferred compensation plan were $21.1 million at September 30, 2025, an increase from $18.9 million at December 31, 2024[70] Derivative Instruments and Financial Instruments - The company has not designated any of its derivative instruments as accounting hedges, and these contracts are recoverable through purchased-gas cost adjustment mechanisms[94] - The fair value of derivative instruments - swaps was $6.921 million as of September 30, 2025, compared to $3.213 million at December 31, 2024[97] - The company held over-the-counter natural gas fixed-price swaps with a total notional amount of 7.65 Bcf for the heating season ending March 2026, compared to 6.20 Bcf for the heating season ending March 2025[92] - The company paid premiums of $0.8 million for purchased natural gas call options with a total notional amount of 0.80 Bcf for the heating season ending March 2026, up from $0.6 million for 0.60 Bcf for the previous season[93]

Financial Data and Key Metrics Changes - The company has narrowed its 2025 earnings forecast, now expecting earnings per share to be between $4.34 and $4.40, with net income projected to range between $262 million and $266 million [4][7] - Third quarter net income was $26.5 million, or $0.44 per diluted share, compared to $19.3 million, or $0.34, in the same period last year, reflecting a year-over-year increase [7][8] - Revenues for the third quarter increased by approximately $19.2 million from new rates and $1.4 million from continued customer growth [7] Business Line Data and Key Metrics Changes - Operating and maintenance expenses increased approximately 4.9% year over year, primarily due to higher labor costs and the decision to execute certain activities earlier than planned [8] - The Austin System Reinforcement Project was completed in the third quarter, boosting available winter peak capacity by approximately 25% [5][12] Market Data and Key Metrics Changes - The company serves three states that produce over one-third of U.S. natural gas, with a strong commitment to economic growth and the use of natural gas for residential and commercial applications [4] - The company is actively pursuing growth opportunities in high-growth sectors such as data centers, advanced manufacturing, and utility-scale power generation [4][13] Company Strategy and Development Direction - The company is focused on leveraging growth opportunities while maintaining customer affordability, as demonstrated by the completion of the Austin System Reinforcement Project [5][12] - The company is working on significant utility-scale power generation projects approximating 1.5 gigawatts of capacity across its three states [13][14] - The company aims to provide fast, cost-effective service through existing infrastructure, minimizing capital needs while enhancing system reliability [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for the rest of the year, citing strong year-to-date performance and the impact of Texas House Bill 4384 [4] - The management noted that the recent Federal Reserve interest rate cuts could positively influence future earnings guidance [20][21] - The company remains committed to providing safe, reliable, and affordable natural gas to its 2.3 million customers [15] Other Important Information - The company plans to settle roughly $200 million of forward shares in December and defer approximately $25 million for year-end 2026 settlement [10] - The board declared a quarterly dividend of $0.67 per share, unchanged from the prior quarter [10] Q&A Session Summary Question: Long-term growth outlook considering legislation and Fed cuts - Management indicated that recent Fed cuts have been earlier than expected and that they anticipate additional cuts in the coming years, which could positively impact earnings guidance [20][21] Question: Clarification on tightening of 2025 guidance range - Management explained that the tightening was due to additional operating and maintenance costs incurred from executing certain activities earlier than planned [22][23] Question: Growth rate above 6% and structural outlook - Management confirmed that the growth rate is structural in nature and expects to be above the high end of the previously outlined range for the duration of the five-year period [32][33] Question: Large load activity and investment opportunities - Management noted that large load projects are being pursued across all three states, leveraging existing systems to respond quickly to customer needs [34][35] Question: Impact of bringing services in-house on O&M costs - Management acknowledged that while there are upfront costs associated with insourcing, the long-term benefits are expected to outweigh these initial investments [39][40] Question: Capital expenditure plans for 2026 - Management indicated an upward trajectory for capital expenditures in 2026, with potential for more punctuated steps up in spending [42][43] Question: Benefits of Texas legislation on capital planning - Management stated that while the Texas legislation provides more opportunities, it will not alter the fundamental approach to capital allocation [55][56] Question: Other opportunities beyond line locating and watch and protect - Management confirmed that they are exploring additional opportunities to bring more services in-house, enhancing capabilities and efficiency [60][61]

Core Insights - ONE Gas, Inc. (OGS) reported third-quarter 2025 operating earnings per share (EPS) of 44 cents, matching the Zacks Consensus Estimate and representing a 29.4% increase from the previous year's earnings of 34 cents [1][9] OGS' Revenues - OGS recorded revenues of $379.1 million, which fell short of the Zacks Consensus Estimate of $383 million by 0.9% but showed an 11.4% increase from $340.4 million in the prior-year quarter [2][9] Highlights of OGS' Earnings Release - Total natural gas volumes delivered were 58.4 billion cubic feet, a decrease of 2.3% year-over-year - OGS served 2,284,000 customers, reflecting a 0.5% year-over-year increase - Total operating expenses rose to $237.1 million, up 7.1% year-over-year, driven by increases in operations and maintenance, depreciation and amortization, and general taxes - Operating income increased by 9.9% year-over-year to $65.4 million [3] Financial Performance - OGS incurred net interest expenses of $35.4 million, down 9.5% year-over-year [4] - As of September 30, 2025, OGS had cash and cash equivalents of $9.05 million, a decrease from $58 million as of December 31, 2024 - Total long-term debt (excluding current maturities) was $2.36 billion, down from $2.39 billion as of December 31, 2024 - Cash provided by operating activities in the first nine months of 2025 was $535.8 million, compared to $305.8 million in the same period last year [5] Capital Expenditures - During the first nine months of 2025, capital expenditures were $539.4 million, an increase from $523.6 million in the year-ago period [6] OGS' 2025 Guidance - OGS narrowed its 2025 financial guidance, now expecting net income in the range of $262-$266 million, compared to the previous range of $261-$267 million - Earnings per diluted share are now expected to be in the range of $4.34-$4.40, revised from $4.32-$4.42 - The Zacks Consensus Estimate for earnings is pegged at $4.36, which is below the midpoint of the company's revised guidance [7][9] OGS' Zacks Rank - Currently, ONE Gas carries a Zacks Rank 2 (Buy) [8]

Financial Performance - Third quarter 2025 net income was $26.5 million, or $0.44 per diluted share, compared to $19.3 million, or $0.34 per diluted share, in Q3 2024[2] - Year-to-date 2025 net income reached $177.9 million, or $2.94 per diluted share, up from $145.8 million, or $2.56 per diluted share, in the same period last year[2] - Operating income for Q3 2025 was $65.4 million, an increase from $59.5 million in Q3 2024[3] - Total revenues for the three months ended September 30, 2025, were $379.1 million, an increase of 11.3% from $340.4 million in the same period last year[27] - Net income for the nine months ended September 30, 2025, was $177.9 million, up 22.0% from $145.8 million in the prior year[27] - Operating income for the three months ended September 30, 2025, was $65.4 million, compared to $59.4 million for the same period in 2024, reflecting a 10.3% increase[27] - Earnings per share for the nine months ended September 30, 2025, were $2.96, up from $2.57 in the same period last year, representing a 15.1% increase[27] - Operating income for the nine months ended September 30, 2025, was $317.7 million, compared to $274.6 million for the same period in 2024, reflecting a 15.7% increase[42] - Net income for Q3 2025 was $26.5 million, up 37.3% from $19.3 million in Q3 2024[42] Capital Expenditures - Capital expenditures for Q3 2025 were $207.6 million, compared to $197.7 million in the same period last year[4] - Year-to-date capital expenditures were $575.4 million, slightly up from $571.7 million in the same period last year[8] - The company expects total capital expenditures, including asset removal costs, to be approximately $750 million in 2025[15] - Capital expenditures for the nine months ended September 30, 2025, were $539.4 million, compared to $523.6 million in the same period last year, reflecting a 3.0% increase[33] Revenue and Sales - The company reported an increase of $92.2 million from new rates year-to-date 2025[6] - Natural gas sales for Q3 2025 were $327.3 million, a 12.9% increase from $289.8 million in Q3 2024[42] - Total revenues for Q3 2025 reached $379.1 million, a 11.5% increase from $340.4 million in Q3 2024[42] Guidance and Dividends - The company narrowed its 2025 diluted earnings per share guidance to a range of $4.34 to $4.40, from a previous range of $4.32 to $4.42[2] - The company anticipates net income for 2025 to be in the range of $262 million to $266 million, compared to the previous range of $261 million to $267 million[14] - The board declared a quarterly dividend of $0.67 per share, payable on December 1, 2025[2] - The company declared a fourth quarter dividend of $0.67 per share, up from $0.66 per share in the previous year[27] - The company narrowed its 2025 financial guidance, indicating a focus on maintaining operational efficiency and cost management[34] - The company narrowed its 2025 financial guidance, indicating a more focused outlook for the remainder of the year[40] Assets and Cash Flow - Total assets as of September 30, 2025, were $8.5 billion, compared to $8.4 billion as of December 31, 2024, indicating a growth of 1.0%[31] - Cash provided by operating activities for the nine months ended September 30, 2025, was $535.8 million, an increase of 75.0% from $305.8 million in the prior year[33] - Total assets decreased to $257.6 million as of September 30, 2025, down from $291.2 million a year earlier, representing an 11.5% decline[39] Customer Metrics and Operational Efficiency - The average number of residential customers increased to 2,109,000 in Q3 2025, compared to 2,096,000 in Q3 2024[42] - Operating expenses for Q3 2025 were $110,000, marginally lower than $111,000 in Q3 2024[40] - The company reported a significant increase in heating degree days, with actual degree days at 14 compared to 8 in Q3 2024, indicating colder weather conditions[42]

Core Insights - ONE Gas, Inc. reported a strong third quarter performance with operating income of $65.4 million, up from $59.5 million in the same quarter of 2024, reflecting disciplined execution of strategy and operational efficiency [2][11] - The company narrowed its 2025 financial guidance, expecting net income in the range of $262 million to $266 million and diluted earnings per share between $4.34 and $4.40 [10][13] - A quarterly dividend of $0.67 per share was declared, payable on December 1, 2025, indicating a commitment to returning value to shareholders [11] Financial Performance - For the third quarter of 2025, total revenues reached $379.1 million, compared to $340.4 million in the third quarter of 2024, driven by increased natural gas sales and new rates [11][23] - Year-to-date operating income for 2025 was $317.7 million, up from $274.6 million in 2024, highlighting consistent growth [4][11] - Net income for the third quarter was $26.5 million, or $0.44 per diluted share, compared to $19.3 million, or $0.34 per diluted share, in the prior year [11][23] Capital Expenditures - Capital expenditures and asset removal costs for the third quarter of 2025 totaled $207.6 million, slightly higher than $197.7 million in the same period last year, primarily for system integrity and service extension [3][11] - Year-to-date capital expenditures were $575.4 million, compared to $571.7 million in the same period of 2024, indicating ongoing investment in infrastructure [5][11] Regulatory Activities - Texas Gas Service filed a rate case in June 2025, requesting a $41.1 million revenue increase, with new rates expected to take effect in the first quarter of 2026 [6] - Kansas Gas Service and Oklahoma Natural Gas also filed for rate increases in 2025, reflecting ongoing regulatory adjustments to support operational costs [8][9] Customer Growth - The average number of customers served by ONE Gas increased to 2.3 million, with notable growth in residential sales in Oklahoma and Texas contributing to revenue increases [11][18] - Natural gas sales volumes for the third quarter were 12.3 Bcf, up from 11.7 Bcf in the same quarter of 2024, indicating a positive trend in demand [11][31]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for ONE Gas, driven by higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - ONE Gas is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year increase of 29.4% [3]. - Revenue projections stand at $382.7 million, marking a 12.4% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 11.42% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - A positive Earnings ESP of +0.38% suggests analysts are optimistic about ONE Gas's earnings prospects [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - ONE Gas currently holds a Zacks Rank of 2, enhancing the likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, ONE Gas met the expected earnings of $0.53 per share, resulting in no surprise [13]. - Over the past four quarters, the company has exceeded consensus EPS estimates twice [14]. Conclusion - ONE Gas is positioned as a compelling candidate for an earnings beat, but investors should consider additional factors before making investment decisions [17].

Group 1 - As of October 9, 2025, two utility stocks are signaling potential warnings for momentum-focused investors [1] - The Relative Strength Index (RSI) is a key momentum indicator, with values above 70 indicating overbought conditions [2] - ONE Gas Inc (NYSE:OGS) has an RSI value of 70.9, with a recent stock price of $81.00 and a 52-week high of $82.25 [6] - NextEra Energy Inc (NYSE:NEE) has a higher RSI value of 82.3, with a recent stock price of $84.04 and a 52-week high of $86.00 [6] Group 2 - Mizuho analyst upgraded ONE Gas from Neutral to Outperform, raising the price target from $77 to $86, with an 8% stock gain over the past month [6] - Evercore ISI Group initiated coverage on NextEra Energy with an Outperform rating and a price target of $92, with a notable 20% stock gain over the past month [6] - ONE Gas has a momentum score of 50.77 and a value score of 72.13, while NextEra Energy's stock performance reflects strong momentum [6]

Core Viewpoint - Investor sentiment is currently affected by fears of a government shutdown, a slowing labor market, and high stock valuations, leading to a potential interest in dividend stocks for stable returns [1] Group 1: Brookfield Infrastructure Partners (BIP) - Brookfield Infrastructure Partners is a global infrastructure company with diversified assets in utilities, transport, midstream, and data sectors [3] - BIP paid a dividend of 43 cents per unit on September 29, marking a 6% year-over-year increase, with an annualized dividend of $1.72 per unit, resulting in a dividend yield of 5.2% [3] - BMO Capital analyst Devin Dodge reiterated a buy rating on BIP with a price target of $42, citing strong organic growth trends expected to become more evident in upcoming quarters [4] - Dodge noted an increase in high-growth platforms within BIP's portfolio and highlighted significant investment opportunities, particularly in digital infrastructure, with hyperscalers' capital spending projected to rise by 50% this year [5] - BIP's funds from operations per unit (FFO/unit) growth is nearing an inflection point, with a compound annual growth rate of about 10% over the past five years, despite challenges [6] - Dodge believes that as FFO/unit growth increases, it will positively impact distribution growth and valuation [7] Group 2: Ares Capital (ARCC) - Ares Capital is a specialty finance company providing direct loans and investments to private middle-market companies, offering a quarterly dividend of 48 cents per share, equating to an annualized dividend of $1.92 per share and a yield of 9.4% [8] - RBC Capital analyst Kenneth Lee reiterated a buy rating on Ares Capital with a price target of $24, favoring it along with other stocks in the current market scenario [9] - Lee emphasized Ares Capital's competitive advantage through its access to the Ares global credit platform and its potential for above-peer-average return on equity [10] - The experienced senior management team and core earnings per share generation back Ares Capital's dividends, contributing to its strength [11] Group 3: ONE Gas (OGS) - ONE Gas is a regulated natural gas utility serving over 2.3 million customers in Kansas, Oklahoma, and Texas, with a quarterly dividend of 67 cents per share, leading to an annualized dividend of $2.68 per share and a yield of 3.3% [12] - Mizuho analyst Gabe Moreen upgraded OGS to buy from hold, raising the price forecast to $86, citing benefits from Texas legislation and lower interest rates [13] - Moreen anticipates that the Texas HB 4384 legislation could generate an incremental EPS benefit of about 18 cents in fiscal 2026, which will grow with OGS's capital spending [14] - Elevated short-term interest rates previously forced OGS to revise its guidance, but expected Federal Reserve interest rate cuts could ease interest expenses [15] - Moreen highlighted growth opportunities for OGS due to rising natural gas demand from data centers and advanced manufacturers, making it an attractive investment at current valuations [16]