Northwest Natural Holding Co (NWN) Reports Q3 2023 Earnings, Net Loss Widens
Net income for the first nine months of 2023 was $49.2 million, up from $38.4 million in the same period in 2022.
Over 33,000 gas and water utility connections added in the last 12 months, marking a growth rate of 4.0%.
Invested over $240 million in utility systems in the first nine months of 2023 for continued safety and reliability.
Residential rates in Oregon and Washington declined 9% and 14%, respectively.
Northwest Natural Holding Co (NYSE:NWN) released its earnings report for the third quarter of 2023 on November 3, 2023. The company reported a net loss of $23.7 million ($0.65 per share) for Q3 2023, compared to a net loss of $19.6 million ($0.56 per share) for the same period in 2022. However, the net income for the first nine months of 2023 stood at $49.2 million ($1.37 per share), up from $38.4 million ($1.14 per share) for the same period in 2022.
Company Performance and Financial Highlights
Despite the net loss in Q3, NWN reported several positive financial achievements. The company added over 33,000 gas and water utility connections in the last 12 months, marking a growth rate of 4.0% as of September 30, 2023. This growth was primarily driven by strong water acquisitions.
NWN also invested over $240 million in its utility systems in the first nine months of 2023 to ensure continued safety and reliability. The company received approval in Oregon and Washington for new rates related to NW Natural's Purchased Gas Adjustment (PGA) mechanism, which includes estimated gas costs for the upcoming winter heating season. As a result, residential rates in Oregon and Washington declined 9% and 14%, respectively.
Key Details from Financial Statements
For the third quarter of 2023, NWN reported a net loss of $23.7 million (or $0.65 per share), compared to a $19.6 million (or $0.56 per share) net loss for the same period in 2022. This reflects the seasonal nature of the gas utility's earnings where the majority of revenues are generated during the winter heating season in the first and fourth quarters each year.
Net income increased $10.9 million to $49.2 million (or $1.37 per share) for the first nine months of 2023, compared to $38.4 million (or $1.14 per share) for the same period in 2022. This increase was due to new rates in Oregon and Washington for the natural gas utility, customer growth, and lower pension expense, partially offset by higher operations and maintenance expenses and interest expense.
CEO Commentary
We continue to execute on our strategy and growth opportunities," said David H. Anderson, CEO of NW Natural Holdings. "Customers are paying 8% less for their natural gas bill now than they did 15 years ago. We're excited to continue passing back gas cost savings to our customers and at the same time continue to invest in our system to meet customers' needs for today and tomorrow. Related to our water and wastewater utilities, we continue to close transactions and grow that business. I'm proud of our achievements and our long-term growth prospects."
Looking Ahead
NW Natural Holdings reaffirmed its 2023 earnings guidance in the range of $2.55 to $2.75 per share. The company's long-term earnings per share growth rate target is 4% to 6% compounded annually from 2022 through 2027.
Explore the complete 8-K earnings release (here) from Northwest Natural Holding Co for further details.
This article first appeared on GuruFocus.
