Benzinga | May 6, 2021 05:52PM EDT

Southwest Gas Holdings Raises FY21 EPS Guidance From $3.95-$4.20 To $4.00-$4.20 vs $4.14 Est.

Outlook for 2021

Based on results to date, management has updated its estimated 2021 diluted earnings per share to be between $4.00 and $4.20 (previously $3.95 to $4.20). Other highlights of 2021 expectations (including updates) are as follows:

Natural Gas Operations Segment:

* Operating margin for 2021 is anticipated to benefit from customer growth (1.7%), rate relief in all three states in which we operate, expansion projects, and infrastructure tracker mechanisms. Combined, these items are expected to produce an increase in operating margin of 6% to 8%.

* Total pension costs are expected to be relatively flat compared to 2020, but will be reflected as an increase in operations and maintenance cost of about $6 million, with a comparable decrease to other expense (associated with non-service-related pension costs).

* Operating income is expected to increase 3% to 5%.

* COLI earnings of $3 million to $5 million are included for full-year 2021.

* Capital expenditures in 2021 are estimated at approximately $700 million, in support of customer growth, system improvements, and pipe replacement programs.

Utility Infrastructure Services Segment:

* Centuri's revenues for 2021 are expected to be 1% to 4% greater than the record 2020 amount (which included $82 million of emergency storm restoration services).

* Operating income is expected to be approximately 5.3% to 5.8% of revenues.

* Interest expense is expected to be $7 million to $8 million (previously $8 million to $9 million).

* Net income expectations reflect earnings attributable to Southwest Gas Holdings, net of earnings attributable to noncontrolling interests (estimated between $5 million and $6 million). Changes in Canadian exchange rates could influence results.