Northwest Natural Company (NWN) Q3 2024 earnings summary

Executive summary

• Reported Q3 2024 net loss of $27.2 million ($0.71/share) vs. $23.7 million ($0.65/share) in Q3 2023; YTD net income was $33.9 million ($0.88/share), down from $49.2 million ($1.37/share) in the prior year, mainly due to regulatory lag and inflation.

• Customer base grew 1.9% year-over-year, surpassing 875,000, with nearly 17,000 new gas and water utility connections, mainly from water acquisitions.

• Closed Puttman/ICH water acquisition, expanding into Idaho, Oregon, and California, and increased recycled water and wastewater customers.

• Achieved strong execution on capital investment, regulatory dockets, and growth opportunities across gas, water, and renewables segments.

• Increased annual dividend for 69th consecutive year to $1.96/share.

Financial highlights

• Q3 2024 consolidated net loss was $27.2 million; YTD net income was $33.9 million, down 31% year-over-year.

• Q3 2024 margin was flat year-over-year at $68.9 million; YTD margin up $0.9 million to $397.4 million.

• Utility margin remained stable; O&M increased $1.3 million in Q3 but decreased $2.5 million YTD due to cost-saving measures.

• Dividend per share increased to $0.4900 quarterly, annualized $1.96.

• Operating cash flow for first nine months was $219.7 million, down from $301.5 million in 2023, mainly due to RNG facility payment and higher pension contributions.

Outlook and guidance

• Reaffirmed 2024 GAAP EPS guidance of $1.94–$2.14 and adjusted EPS of $2.20–$2.40, excluding Oregon regulatory disallowance.

• Maintained long-term EPS growth target of 4%–6% CAGR from 2022–2027.

• CapEx for 2025 expected to be similar to or slightly lower than 2024; 2024 CapEx expected at $350M–$400M.

• NW Natural Water to invest ~$40M in 2024 and $120M–$140M over five years.

• Combined incremental capital needs for NW Holdings and NW Natural projected at $500M–$575M through 2026.