PORTLAND, Ore. - Northwest Natural Holding Company (NYSE: NWN), reported a dip in its fourth quarter earnings per share (EPS) at $1.21, falling short of analyst expectations by $0.07. The stock is trading flat in Friday's premarket session as of this writing.
Despite the EPS miss, the company's revenue for the quarter slightly exceeded analyst projections, coming in at $355.71 million against a consensus estimate of $354.61 million.
The company has initiated its guidance for the fiscal year 2024, projecting an EPS range of $2.20 to $2.40, which is notably below the analyst consensus of $2.75. This conservative forecast reflects the company's anticipation of regulatory lag impacting its natural gas distribution segment, primarily due to significant investments aimed at ensuring safe and reliable service for customers and increased operating expenses driven by inflation.
For the full year 2023, Northwest Natural Holdings reported a net income of $93.9 million, or $2.59 per share, an improvement from the previous year's $86.3 million, or $2.54 per share. This growth was attributed to new rates in Oregon and Washington for the natural gas utility, customer growth, and lower pension expenses, partially offset by higher operations, maintenance expenses, and interest expense.
The company's natural gas distribution segment saw a net income increase of $14.4 million, or $0.25 per share, reflecting the benefits of new rates and customer growth. However, warmer weather compared to the previous year led to lower usage and a decrease in margin. Operations and maintenance expenses rose due to higher payroll and information technology costs, among other factors.
NW Natural Holdings' CEO, David H. Anderson, commented on the company's performance, "For over 165 years, NW Natural Holdings has provided essential energy to the communities it serves. We've demonstrated our unwavering commitment to safety, service, and our constant focus on the future, while delivering strong financial performance." He expressed confidence in the company's long-term EPS growth target of 4% to 6% from 2022 through 2027, based on a base year EPS of $2.54 in 2022.
The company continues to invest in its utility systems, adding over 15,000 gas and water utility connections in the last 12 months and closing four water utility acquisitions in 2023. These strategic moves are part of NW Natural Holdings' broader vision to expand its service offerings and enhance customer satisfaction, which has been consistently ranked high in the J.D. Power Gas Utility Residential Customer Satisfaction Study.
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