ONE Gas Delivers Strong 2024 Earnings Performance Amidst Challenging Weather Conditions
ONE Gas, a leading natural gas distributor, has reported strong earnings for the fourth quarter of 2024, exceeding expectations and marking its eleventh consecutive year of meeting or exceeding midpoint guidance.
Despite harsh weather conditions, with temperatures as low as 25 degrees below zero in some areas, ONE Gas's team remained committed to providing safe and reliable natural gas service to their customers. As CEO Sid McAnnally noted during the company's earnings conference call, "our team in the field is rising to the challenge and remains committed to our primary objectives: providing natural gas service and prioritizing the safety and well-being of our customers and communities."
The company's financial performance was also impressive, with GAAP net income for the fourth quarter reaching $77 million or $1.34 per diluted share, compared to $71 million and $1.27 in the same period last year. For the full year, ONE Gas reported GAAP net income of $223 million or $3.91 per diluted share, exceeding its revised guidance midpoint.
ONE Gas's strong execution and planning enabled the company to deliver earnings and capital execution as projected, despite the challenges posed by weather conditions. The company's ability to effectively normalize weather impacts across its three-state service territory also contributed to its positive earnings performance.
In addition to its financial success, ONE Gas has made significant strides in modernizing and reinforcing its distribution system. The completion of the cast iron replacement plan in 2019 and the finishing of the bare steel service line replacement program in Kansas marked important milestones in this effort. These projects have resulted in a reduction of leak-related emissions by over 50% since 2005.
Customer growth remains a key driver for ONE Gas, with the company setting 23,000 new meters across its service territory in 2024. Robust customer growth was observed in every major metro area across the three states, driven by a need for new housing and focused economic development. The company is also exploring opportunities to supply natural gas for power generation, addressing the needs of data centers, industrial applications, and electric providers seeking a reliable power source.
ONE Gas's financial results were discussed by CFO Chris Sighinolfi during the conference call. He noted that despite a 24% warmer-than-normal weather quarter, the impact on earnings was not material due to effective weather normalization mechanisms in each of the company's three states. Sighinolfi also highlighted the successful execution of new rates, which contributed to a $24.6 million increase in revenues during the fourth quarter.
