Spire Inc. is on track to close its acquisition of Piedmont Natural Gas Co. Inc.'s Tennessee distribution business in the first quarter of 2026, with the possible sale of Spire's gas storage facilities to aid in the financing of the new asset.
The company announced the $2.48 billion deal to take over the Tennessee utility from Duke Energy Corp. in July.
Spire completed an antitrust review in September and received Federal Energy Regulatory Commission approval of the transfer of Piedmont Tennessee's gas supply contracts, executives said during a fiscal fourth-quarter earnings call on Nov. 14. Approval is pending with the Tennessee Public Utility Commission.
Spire's financing plan "includes a balanced mix of debt, equity and hybrid securities, ensuring we maintain financial flexibility and strength," President and CEO Scott Doyle said. "We expect a minimal amount of Spire common shares to be issued as a percentage of total financing, and we have launched a process evaluating the sale of our gas storage facilities as potential sources of funds."
The company expects to complete the evaluation process by Dec. 31.
Rate case updates
Spire received a positive outcome in a Missouri rate case filed in August, and the new rates took effect in October. Missouri also passed legislation that allows gas and water utilities to set rates based on projected rather than historical expenses.
Spire is in the rate stabilization and equalization rate setting process for a rate case in Alabama.
Earnings results
Spire reported a fiscal fourth-quarter adjusted loss of $24.1 million, or 47 cents per share, "reflecting the seasonality" of the business, according to CFO Adam Woodard. Adjusted earnings fell below company expectations due to higher utility operations and maintenance expenses. The S&P Capital IQ consensus estimate for Spire's fourth-quarter was negative 38 cents per share.
Adjusted earnings for fiscal year 2025 were $275.5 million, or $4.44 per share, up 7.5% compared to the previous year's $4.13 per share.
Spire's fiscal-year 2026 adjusted EPS guidance is $5.25-$5.45, excluding the pending acquisition of Piedmont Tennessee. Woodard provided Spire's fiscal 2027 guidance range of $5.65-$5.85 with a long-term adjusted EPS growth target of 5%-7%. The 2027 guidance includes earnings from the Piedmont Tennessee deal and excludes earnings from the storage facilities due to the expected sale.
"This strong growth is driven by execution on infrastructure investment, constructive regulatory outcomes and the strategic acquisition of Piedmont Tennessee to expand our gas utility business," Woodard said.
