Atmos Energy Corporation
ATO · NYSE
Next quarter
Reports Nov 4, 2026, after the close.
Consensus is $1.14 EPS for Sep 2026 across 5 estimates, ranging $1.11 to $1.16.
ATO Jun 2026
- 6.72%
- -0.13%
- $1.34
- $1.43
- —
- $879.06M
Reported results
- $879.06M
- $320.41M
- 36.45%
- $242.69M
- $1.43
Highlights
- EPS beat: Q3 FY2026 diluted EPS was $1.43, 6.72% above the $1.34 consensus estimate, and up 23.3% from $1.16 a year earlier.
- Profit growth: Net income rose 30.2% year over year to $242.7 million; operating income increased 27.1% to $320.4 million.
- Revenue: Operating revenue grew 4.8% year over year to $879.1 million, with pipeline and storage growth offsetting a relatively modest increase in distribution revenue.
- Pipeline and storage: Segment operating income increased 34.9% to $211.3 million, supported by rate adjustments, higher contracted capacity and stronger through-system spreads.
- Distribution: Segment operating income rose 14.3% to $109.1 million as rate adjustments and customer growth outweighed higher depreciation, property taxes and labor costs.
- Rate recovery: Ratemaking actions implemented in the first nine months of FY2026 added $355.0 million to annual operating income; requests in progress represented a further $373.4 million as of June 30.
- Capital program: Nine-month capital expenditures reached $3.08 billion, up from $2.60 billion a year earlier; more than 85% was directed to safety and reliability.
- Funding: The company reported $4.6 billion of liquidity at June 30 and 59.8% equity capitalization, after issuing $941.7 million of equity and $1.30 billion of long-term debt during the first nine months.
Analysis
Atmos Energy’s Q3 FY2026 diluted EPS of $1.43 topped the $1.34 consensus by 6.72%. The quarter also showed year-over-year earnings growth: revenue increased 4.8% to $879.1 million, operating income rose 27.1% to $320.4 million, and net income grew 30.2% to $242.7 million. Sequentially, results were lower than Q2 FY2026, when revenue was $1.96 billion and diluted EPS was $3.47, consistent with the company’s seasonal earnings pattern; it says roughly 70% of distribution revenue is earned in the first six months of the fiscal year.
The print was defined by regulated rate recovery and stronger pipeline and storage results. Distribution operating income rose 14.3%, with rate adjustments—primarily in Mid-Tex—offsetting higher costs and lower distribution sales volumes. Pipeline and storage operating income grew 34.9%, benefiting from rate increases, contracted capacity and wider spreads on through-system activity. Across the first nine months, implemented ratemaking actions added $355.0 million to annual operating income, while $373.4 million of requests were in progress at quarter-end. Investment remained substantial: nine-month capital expenditures were $3.08 billion, and Atmos funded its program through operating cash flow and debt and equity issuance. The company expects approximately $26 billion of capital spending from FY2026 through FY2030, with more than 80% directed to safety and reliability.
Quarter earnings
- Reported results: Revenue was $879.1 million, operating income $320.4 million and net income $242.7 million. Diluted EPS of $1.43 exceeded the $1.34 consensus estimate by 6.72%.
- Year-over-year comparison: Revenue increased from $838.8 million, operating income from $252.1 million and net income from $186.4 million; diluted EPS rose from $1.16.
- Sequential comparison: Q2 FY2026 revenue was $1.96 billion and diluted EPS was $3.47, both higher than this quarter. The company’s earnings are seasonally weighted toward the first half of its fiscal year.
- Cost and interest: Depreciation and amortization increased to $201.5 million from $185.8 million, while interest charges declined to $33.1 million from $41.5 million.
Distribution segment
- Segment results: Operating income increased 14.3% to $109.1 million, and net income rose to $89.4 million from $70.5 million.
- Rate gains: Rate adjustments added $21.0 million to operating income, primarily in Mid-Tex; customer growth and higher industrial load contributed another $3.9 million.
- Cost offsets: Employee-related costs increased $9.4 million, while depreciation and property taxes associated with investment rose $20.0 million.
- Volumes: Distribution sales volumes fell to 37,376 MMcf from 41,008 MMcf year over year. The company’s reported operating income improvement therefore centered on rates rather than higher sales volumes.
- Texas legislation: The segment’s income before taxes benefited by $26.7 million from Texas legislation related to infrastructure spending, reflected across the relevant expense and interest lines.
Pipeline and storage
- Segment results: Operating income rose 34.9% to $211.3 million, and net income increased to $153.3 million from $115.9 million.
- Rate and capacity: Rate adjustments contributed $35.1 million, mainly from GRIP filings approved in June 2025 and May 2026; higher capacity contracted by tariff-based customers added $4.3 million.
- Through-system activity: Increased spreads lifted income from APT through-system activities by $18.1 million. Pipeline transportation volumes were broadly flat at 216,439 MMcf versus 216,416 MMcf.
- Investment costs: Higher depreciation and property taxes associated with capital investment partially offset the gains, increasing $8.4 million.
- Texas legislation: Infrastructure-related Texas legislation favorably affected the segment’s pretax income by $12.1 million during the quarter.
Rate recovery
- Actions implemented: Ratemaking actions during the first nine months of FY2026 were expected to increase annual operating income by $355.0 million, including $242.8 million from distribution proceedings and the approved $112.2 million APT GRIP filing.
- Requests pending: The company reported $373.4 million of annual operating income sought in proceedings in progress as of June 30, including $273.2 million for Mid-Tex Cities and $37.8 million for Mississippi.
- Post-quarter developments: The Colorado commission approved a $10.8 million operating income increase effective July 1. Louisiana implemented a $30.3 million increase subject to refund, with final approval anticipated in Q4 FY2026.
- Recovery framework: Infrastructure mechanisms and formula rate filings help the company recover eligible investment with less regulatory lag; the company says more than 80% of its planned FY2026–FY2030 capital spending will support safety and reliability.
Investment and funding
- Capital expenditures: Spending totaled $3.08 billion in the first nine months, up from $2.60 billion a year earlier; over 85% was for distribution and transportation system safety and reliability.
- Cash generation: Operating cash flow was $1.67 billion, down from $1.70 billion in the prior-year period, primarily because of the timing of gas cost recoveries.
- Financing: Atmos raised $941.7 million from equity forward sales and received $1.30 billion in long-term debt proceeds during the nine months. In June it issued $700 million of 4.75% senior notes due 2032.
- Liquidity and capitalization: Total liquidity was approximately $4.6 billion at June 30, including $521.0 million of cash, $936.8 million available from equity forward sales and $3.09 billion of undrawn credit capacity. Equity represented 59.8% of capitalization.
- Longer-term plan: Atmos anticipates approximately $26 billion of capital expenditures between FY2026 and FY2030; it says full recovery of those costs through rates is not assured.
