Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors

Are you looking to understand the financial stability and future prospects of Spire Inc. (SR)? Delve into a detailed analysis of Spire's fiscal year 2024, where net income reached $250.9 million, or $4.19 per share, a notable increase from $217.5 million, or $3.85 per share, in fiscal year 2023. Discover how strategic investments and operational efficiencies are driving growth, even amidst challenges like fluctuating market conditions and rising interest expenses. Ready to explore the key factors influencing Spire's financial health and what it means for investors? Keep reading to unlock valuable insights!

Spire Inc. (SR) Revenue Analysis

Understanding Spire Inc.'s revenue streams involves examining its primary sources, growth trends, and segment contributions. A detailed look into these areas provides valuable insights for investors.

Spire Inc. primarily generates revenue through its gas utility operations, serving residential, commercial, and industrial customers. These operations are crucial to the company’s financial performance. For example, Spire reported total operating revenues of $2.6 billion for the fiscal year 2024.

Here's a breakdown of what to consider regarding Spire's revenue streams:

• Primary Revenue Sources: Predominantly from regulated gas distribution operations.
• Year-over-Year Revenue Growth: Analyzing historical trends to understand growth patterns.
• Segment Contribution: Assessing how each business segment contributes to the overall revenue.
• Significant Changes: Identifying any notable shifts in revenue streams due to market conditions or strategic decisions.

Spire’s revenue streams are significantly influenced by factors such as weather patterns, regulatory changes, and economic conditions in its service areas. These elements can lead to fluctuations in demand and, consequently, in the company's financial performance.

To better illustrate Spire's revenue composition, consider the following example:

Spire Missouri Inc., a key subsidiary, reported operating revenues of $1.844 billion for 2024. The breakdown of this revenue is as follows:

• Residential Sales: $799.4 million
• Commercial Sales: $404.2 million
• Industrial Sales: $319.7 million
• Transportation: $223.8 million
• Other Operating Revenues: $97.1 million

Analyzing these components helps investors understand the stability and diversity of Spire's income.

For a more comprehensive understanding of Spire Inc.'s financial health, you might find this resource helpful: Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors.

Spire Inc. (SR) Profitability Metrics

Analyzing Spire Inc.'s profitability involves examining its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. By comparing these metrics against industry averages and historical trends, investors can gain valuable insights into the company's ability to generate profits.

Here's a detailed look into Spire Inc.'s profitability:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). A higher gross profit margin suggests that Spire Inc. is efficient in managing its production costs.
• Operating Profit Margin: The operating profit margin reveals the percentage of revenue left after deducting both COGS and operating expenses. It reflects the company's efficiency in managing its core business operations.
• Net Profit Margin: This margin shows the percentage of revenue that translates into net income after all expenses, including interest and taxes, have been paid. It is a comprehensive measure of overall profitability.

To provide a clearer picture, let's consider a hypothetical example based on typical financial analysis frameworks. Note that the following data is illustrative and should be replaced with actual figures from Spire Inc.'s financial statements for an accurate analysis.

Trends in Profitability Over Time: Examining Spire Inc.'s profitability trends over several years helps identify whether the company is improving its efficiency and earnings. Consistent or increasing profit margins are generally a positive sign, while declining margins may indicate operational or financial challenges.

Comparison with Industry Averages: Comparing Spire Inc.'s profitability ratios with industry averages provides context. If Spire Inc.'s margins are higher than the industry average, it may indicate a competitive advantage. Conversely, lower margins may suggest areas for improvement.

Analysis of Operational Efficiency: Evaluating Spire Inc.'s operational efficiency involves assessing how well the company manages its costs and assets to generate revenue. Key areas to examine include:

• Cost Management: Efficient cost management is crucial for maintaining and improving profit margins. This includes controlling production costs, operating expenses, and administrative overhead.
• Gross Margin Trends: Monitoring gross margin trends can reveal insights into the company's pricing strategy and cost control effectiveness. A rising gross margin is usually a favorable indicator.

For more in-depth information, you can explore: Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors.

Spire Inc. (SR) Debt vs. Equity Structure

Understanding how Spire Inc. (SR) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and any recent financing activities.

Here's a breakdown of Spire Inc.'s debt and equity situation:

• Overview of Debt Levels:

As of December 2024, Spire's long-term debt and capital lease obligations totaled $3.698 billion. In contrast, the short-term debt and capital lease obligations for the same period amounted to $1.201 billion.

• Debt-to-Equity Ratio:

The company's debt-to-equity ratio as of December 31, 2024, was 1.477. Another source indicates a debt-to-equity ratio of 148%. For the fiscal year 2024, the debt-equity ratio was 1.23864. These figures provide insight into the proportion of debt and equity Spire uses to finance its assets. It's worth noting that comparisons to industry standards can offer a more contextual understanding of whether Spire's ratio is high or low.

• Recent Debt Issuances and Refinancing:

In February 2024, Spire priced a public offering of $350 million in senior notes due in 2026. The company intended to use $175 million of the net proceeds to repay existing debt and for general corporate purposes. Also in February 2024, Spire successfully remarketed $175 million principal amount of its 2021 Series A 0.75 percent Remarketable Senior Notes due 2026. Furthermore, in August 2024, Spire issued $320 million in Spire Missouri bonds due in 2034. These issuances were largely tied to refinancing maturing debt.

In early 2025, Spire Missouri Inc. secured $150 million through the issuance of two sets of First Mortgage Bonds. This included $90 million in bonds due in 2030 with a 4.88% interest rate and $60 million due in 2032 at a 5.12% interest rate.

• Credit Ratings:

As of August 2024, Spire Inc. maintained investment-grade credit ratings. However, in June 2024, S&P Global Ratings lowered its ratings on Spire and its subsidiaries to BBB+ from A-. The stable outlook reflects expectations of consolidated FFO to debt of 12%-14% through fiscal year 2026.

• Balancing Debt and Equity:

As of September 30, 2024, Spire's long-term consolidated capitalization consisted of 46% equity. Management focuses on maintaining a strong balance sheet and believes the company has adequate access to credit and capital markets.

For more detailed insights into Spire Inc.'s (SR) financial health, you can read: Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors

Spire Inc. (SR) Liquidity and Solvency

When evaluating Spire Inc.'s financial health, understanding its liquidity and solvency is crucial. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations.

Assessing Spire Inc.'s Liquidity:

• Current and Quick Ratios: These ratios provide insights into Spire's ability to cover its short-term liabilities with its short-term assets.
• Analysis of Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) can reveal whether Spire is efficiently managing its short-term resources.
• Cash Flow Statements Overview: Examining the cash flow statement, particularly the operating, investing, and financing activities, can highlight the sources and uses of cash.
• Potential Liquidity Concerns or Strengths: Identifying any potential weaknesses or strengths in Spire's liquidity position is essential for investors.

Spire Inc.'s financial performance can be further understood by analyzing key financial ratios. Here's an overview of some important metrics as of the 2024 fiscal year:

Spire Inc. reported the following cash flows for the fiscal year 2024 (in millions of USD):

• Net cash provided by operating activities: $543.9 million
• Net cash used for investing activities: $(447.6) million
• Net cash used for financing activities: $(129.7) million

These figures show that Spire Inc. generated positive cash flow from its operations but used cash for both investing and financing activities. The investing activities primarily include capital expenditures, while financing activities include dividend payments and debt management.

To gain more insights into Spire Inc.'s mission, vision, and core values, visit: Mission Statement, Vision, & Core Values of Spire Inc. (SR).

Spire Inc. (SR) Valuation Analysis

Determining whether Spire Inc. (SR) is overvalued or undervalued requires a multifaceted approach, considering several key financial ratios, stock performance, and analyst opinions. Let's delve into these aspects to provide a clearer picture of Spire's valuation.

Analyzing valuation ratios helps to understand how the market prices Spire Inc. (SR) relative to its earnings, book value, and cash flow. Here’s a look at some of the key ratios:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of Spire’s earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or Spire's historical average.
• Price-to-Book (P/B) Ratio: The P/B ratio compares Spire’s market capitalization to its book value of equity. It can help determine whether the stock price is justified by the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares Spire’s enterprise value (market cap plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure, especially useful for comparing companies with different capital structures.

Reviewing Spire's stock price trends over the past year or longer offers insights into market sentiment and investor confidence. Significant price appreciation might suggest growing optimism, while a declining price could indicate concerns about the company's prospects. As of April 21, 2025, it's important to look at the stock's performance over the preceding 12 months to gauge recent market behavior.

Dividend yield and payout ratios are relevant if Spire Inc. (SR) distributes dividends. The dividend yield indicates the annual dividend income relative to the stock price, while the payout ratio shows the proportion of earnings paid out as dividends. A high dividend yield might attract income-seeking investors, but a high payout ratio could raise concerns about the sustainability of future dividends.

Keep an eye on what analysts are saying about Spire Inc. (SR). Their consensus ratings, such as buy, hold, or sell, reflect their overall sentiment on the stock's valuation and potential for future growth. These ratings are typically based on in-depth analysis of the company's financials, industry trends, and macroeconomic factors.

To provide a more structured view, consider the hypothetical data presented in the table below. Please note that this data is purely illustrative and should be replaced with actual, up-to-date figures for an accurate valuation analysis.

For insights into Spire Inc.'s strategic direction, you might find this resource helpful: Mission Statement, Vision, & Core Values of Spire Inc. (SR).

Spire Inc. (SR) Risk Factors

Understanding the risks facing Spire Inc. (SR) is crucial for investors assessing the company's financial health and future prospects. These risks span internal operational challenges and external market dynamics. Identifying these potential pitfalls allows for a more informed investment strategy. For further insights into the company's guiding principles, see Mission Statement, Vision, & Core Values of Spire Inc. (SR).

Here's an overview of key risks that could impact Spire's performance:

• Operational Risks: These include the challenges of maintaining and upgrading infrastructure, managing gas supply, and ensuring the safety and reliability of services. Disruptions in these areas can lead to increased costs and reduced profitability.
• Financial Risks: Spire faces risks related to interest rate fluctuations, access to capital markets, and the ability to manage debt levels. Changes in these factors can affect the company's financial stability and ability to fund future investments.
• Regulatory and Legal Risks: The company operates under the close scrutiny of regulatory bodies. Changes in regulations or adverse legal outcomes can significantly impact Spire's operations and financial results.
• Market and Economic Risks: Economic downturns, changes in energy prices, and competition from alternative energy sources can all affect Spire's revenue and profitability.

Spire Inc.'s annual report on Form 10-K, filed with the Securities and Exchange Commission (SEC), provides detailed information about the various risk factors that could affect the company's business, financial condition, and future results.

Some of the key risks highlighted in recent filings include:

Regulatory and Environmental Risks:

Spire is subject to extensive federal, state, and local environmental regulations regarding air and water quality, waste management, and natural resource protection. Compliance with these regulations requires significant capital expenditures. Increasingly stringent environmental regulations, particularly those targeting greenhouse gas emissions, could substantially increase operating costs and limit operational flexibility.

Operational Risks:

A significant portion of Spire’s utility infrastructure consists of pipelines. Damage to pipelines, whether caused by corrosion, leaks, or third-party activities, poses substantial risks. Such incidents could lead to service disruptions, environmental damage, and significant financial liabilities.

Financial and Economic Risks:

Spire's financial performance is closely tied to economic conditions in the regions it serves. Economic downturns can lead to decreased demand for natural gas, impacting revenue. Volatility in natural gas prices also presents a risk, as it can affect the profitability of gas sales and hedging activities.

Mitigation Strategies:

Spire employs various strategies to mitigate these risks:

• Infrastructure Investments: The company invests in upgrading and maintaining its infrastructure to reduce the risk of service disruptions and environmental incidents.
• Regulatory Compliance Programs: Spire maintains robust compliance programs to ensure adherence to all applicable regulations.
• Financial Risk Management: Spire uses hedging strategies to manage the risks associated with fluctuations in interest rates and natural gas prices.

Spire Inc. (SR) Growth Opportunities

Spire Inc. (SR) is strategically positioned for future growth, driven by a combination of infrastructure investments, operational efficiencies, and strategic initiatives. The company's long-term adjusted earnings per share (EPS) growth target remains in the range of 5-7%.

Key elements driving Spire's growth prospects include:

• Infrastructure Investments: Spire is committed to investing in infrastructure upgrades and expansions, particularly within its gas utility segment. The company's 10-year capital investment target is $7.4 billion extending through fiscal year 2034, with 98% of this investment directed towards gas utilities. For fiscal year 2025, capital expenditures are expected to be $790 million.
• Rate Base Growth: Spire anticipates long-term rate base growth of 7-8% annually at Spire Missouri and 6% equity growth at Spire Alabama and Spire Gulf.
• Earnings Growth: Spire reported fiscal 2024 net income of $250.9 million ($4.19 per share) compared to $217.5 million ($3.85 per share) in fiscal 2023. Adjusted earnings for fiscal 2024 were $247.4 million ($4.13 per share) compared to $228.1 million ($4.05 per share) in fiscal 2023.
• Strategic Initiatives: Spire is focused on organic business growth, infrastructure investment, and continuous improvement to deliver value. In Missouri, there are three projects under construction expected to produce approximately 1.5 Bcf of Renewable Natural Gas (RNG), with the first project scheduled to be online in October 2024.
• Competitive Advantages: Spire's competitive edge lies in its state-regulated utility business, which benefits from the necessity of capital-intensive infrastructure, creating a barrier to entry for potential competitors.
• Operational Efficiency: Spire achieved a 3% reduction in run rate operation and maintenance (O&M) expenses in fiscal year 2024 compared to the prior year, demonstrating successful cost management efforts.

Looking ahead, Spire has issued fiscal 2025 adjusted EPS guidance of $4.40 to $4.60. Consensus forward EPS for 2025, 2026, and 2027 are in line with SA's reported future earnings of $4.50 for this year and $5.01 for 2026. The 2027 estimated EPS range from $5.01 to $5.27.

Spire's financial performance in fiscal year 2024 demonstrates a solid foundation for future growth. Gas Utility adjusted earnings were $220.8 million, an increase from $200.5 million in the prior year. Midstream adjusted earnings were $33.5 million, up from $14.1 million in the prior year.

The following table summarizes Spire's recent financial performance and future estimates:

Spire's commitment to sustainability is also noteworthy. The company is focused on reducing emissions and has made progress in reducing Scope 1 and Scope 2 emissions from operations through infrastructure upgrades and other strategies. In 2023, Spire reported a 17,243 metric ton CO2e reduction, or 4.7%, from 2022 levels and replaced more than 173 additional miles of aging infrastructure, which achieved a 13% leak reduction per 1,000 system miles of distribution pipelines compared to 2022 levels.

To gain more insight into the investors of Spire Inc. (SR), consider reading Exploring Spire Inc. (SR) Investor Profile: Who’s Buying and Why?