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.

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

• Continued focus on decarbonization, growth initiatives, and technology investments.

Financial highlights

• Q2 2024 consolidated net loss was $2.8 million, a $4.0 million decrease from Q2 2023.

• Utility margin increased $0.4 million in Q2 and $0.9 million year-to-date, driven by customer growth and deferred balance amortization.

• Gas utility O&M decreased $3.4 million from cost-saving measures; depreciation and taxes increased $2.5 million.

• Cost of gas for the first half of 2024 decreased by $59.5 million year-over-year due to lower average gas costs and reduced volumes.

• 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 2022–2027.

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

• New Oregon rates expected to be effective November 1, 2024, pending approval of a $95 million revenue increase.

• Guidance assumes no significant changes in regulatory policies, mechanisms, or laws.